[House Hearing, 110 Congress]
[From the U.S. Government Printing Office]
VETERANS ENTREPRENEURSHIP
AND SELF EMPLOYMENT
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
of the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
MAY 17, 2007
__________
Serial No. 110-23
__________
Printed for the use of the Committee on Veterans' Affairs
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35-642 PDF WASHINGTON DC: 2008
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COMMITTEE ON VETERANS' AFFAIRS
BOB FILNER, California, Chairman
CORRINE BROWN, Florida STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South RICHARD H. BAKER, Louisiana
Dakota HENRY E. BROWN, Jr., South
HARRY E. MITCHELL, Arizona Carolina
JOHN J. HALL, New York JEFF MILLER, Florida
PHIL HARE, Illinois JOHN BOOZMAN, Arkansas
MICHAEL F. DOYLE, Pennsylvania GINNY BROWN-WAITE, Florida
SHELLEY BERKLEY, Nevada MICHAEL R. TURNER, Ohio
JOHN T. SALAZAR, Colorado BRIAN P. BILBRAY, California
CIRO D. RODRIGUEZ, Texas DOUG LAMBORN, Colorado
JOE DONNELLY, Indiana GUS M. BILIRAKIS, Florida
JERRY McNERNEY, California VERN BUCHANAN, Florida
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
Malcom A. Shorter, Staff Director
______
SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
STEPHANIE HERSETH SANDLIN, South Dakota, Chairwoman
JOE DONNELLY, Indiana JOHN BOOZMAN, Arkansas, Ranking
JERRY McNERNEY, California RICHARD H. BAKER, Louisiana
JOHN J. HALL, New York JERRY MORAN, Kansas
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
May 17, 2007
Page
Veterans Entrepreneurship and Self Employment.................... 1
OPENING STATEMENTS
Chairwoman Stephanie Herseth Sandlin............................. 1
Prepared statement of Chairwoman Herseth Sandlin............. 54
Hon. John Boozman, Ranking Republican Member..................... 2
Prepared statement of Congressman Boozman.................... 54
Hon. Susan A. Davis.............................................. 2
WITNESSES
U.S. Small Business Administration:
William D. Elmore, Associate Administrator, Veterans Business
Development.................................................. 34
Prepared statement of Mr. Elmore............................. 81
Louis J. Celli, Jr., Chairman, Advisory Committee for Veterans
Business Affairs, and Chief Executive Officer, Northeast
Veterans Business Resource Center............................ 38
Prepared statement of Mr. Celli.............................. 87
U.S. Department of Veterans Affairs, Scott F. Denniston,
Director, Office of Small and Disadvantaged Business
Utilization, Center for Veterans Enterprise.................... 36
Prepared statement of Mr. Denniston.......................... 84
______
American Legion, Joseph C. Sharpe, Jr., Deputy Director, Economic
Commission..................................................... 23
Prepared statement of Mr. Sharpe............................. 67
Halfaker and Associates, LLC, Washington, DC, F. Dawn Halfaker,
Owner / Chief Executive Officer................................ 3
Prepared statement of Ms. Halfaker........................... 55
MicroTech, LLC, Vienna, VA, Anthony R. Jimenez, President and
Chief Executive Officer........................................ 6
Prepared statement of Mr. Jimenez............................ 57
National Veterans Business Development Corporation, The Veterans
Corporation, Walter G. Blackwell, President / Chief Executive
Officer........................................................ 32
Prepared statement of Mr. Blackwell.......................... 74
Oak Grove Technologies, Raleigh, NC, Mark Gross, President and
Chief Executive Officer........................................ 4
Prepared statement of Mr. Gross.............................. 56
Veterans Enterprise Training and Service Group, Inc. (VETS
Group), Joe Wynn, President, and Member, Veterans
Entrepreneurship Task Force (VET-Force)........................ 19
Prepared statement of Mr. Wynn............................... 60
Vietnam Veterans of America, Richard F. Weidman, Executive
Director for Policy and Government Affairs..................... 24
Prepared statement of Mr. Weidman............................ 71
SUBMISSION FOR THE RECORD
Veterans of Foreign Wars of the United States, Eric A. Hilleman,
Deputy Director, National Legislative Service, statement....... 93
MATERIAL SUBMITTED FOR THE RECORD
Executive Order 13360--Providing Opportunities for Service-
Disabled Veteran Businesses To Increase Their Federal
Contracting and Subcontracting, dated October 20, 2004......... 95
VETERANS ENTREPRENEURSHIP AND SELF EMPLOYMENT
----------
THURSDAY, MAY 17, 2007
U.S. House of Representatives,
Subcommittee on Economic Opportunity,
Committee on Veterans' Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:20 p.m., in
Room 334, Cannon House Office Building, Hon. Stephanie Herseth
Sandlin [Chairwoman of the Subcommittee] presiding.
Present: Representatives Stephanie Herseth Sandlin,
McNerney, Hall, and Boozman.
Also Present: Representative Susan A. Davis of California.
OPENING STATEMENT OF CHAIRWOMAN HERSETH SANDLIN
Ms. Herseth Sandlin. Good afternoon ladies and gentlemen.
The Veterans' Affairs Subcommittee on Economic Opportunity
hearing on Veteran Entrepreneurship and Self Employment will
come to order. First, I ask unanimous consent that Ms. Susan
Davis of California be invited to sit at the dais for this
Subcommittee hearing today.
Hearing no objection, so ordered.
The Ranking Member and some of the panelists may recall a
joint hearing we held with our colleagues on the Committee on
Small Business back in May of 2005 on Veteran-Owned Small
Businesses.
Today's hearing will build upon that hearing as we receive
testimony to explore the current state of veteran
entrepreneurship and the challenges and obstacles they may
encounter. Small businesses are essential to economic
prosperity. The implementation of strong economic development
plans, especially in rural States like South Dakota and
certainly parts of Arkansas is essential. Time and again,
veterans have continually assisted in preserving this critical
element of our Nation's economic prosperity.
In my home State of South Dakota, more than 17,000 veteran-
owned small businesses are operating. These brave men and women
add tremendous value to our economy when given the opportunity
to start and manage their own businesses.
Starting and growing a small business is no easy task and
can be a difficult challenge. I have heard of many of the
difficulties that disabled veterans face when starting and
developing a small business. In addition, I have also heard
from many members of the National Guard and Reserve in South
Dakota who find it challenging to maintain their small
businesses when deployed overseas to Iraq and Afghanistan and a
number of those who return that look to pursue other
opportunities separate from the career path they were on prior
to deployment. I look forward to working with Ranking Member
Boozman and members of the Subcommittee to focus our efforts on
assisting our Nation's veterans with these challenges. I now
recognize the Ranking Member, Mr. Boozman, for any opening
remarks he may have.
[The prepared statement of Chairwoman Herseth Sandlin
appears on p. 54.]
Mr. Boozman. Thank you, Madam Chairwoman. In the interest
of time, what I would like to do is just make a very brief
statement and then submit the rest for the record if you don't
have any objections.
Ms. Herseth Sandlin. No objection. So ordered.
Mr. Boozman. I am sure you are very pleased at that.
Ms. Herseth Sandlin. Yes, yes, I appreciate it, because I
know we have three panels today and a number of questions.
Ms. Herseth Sandlin. I would defer to see if there is a
brief opening statement that Ms. Davis might have. Any opening
comments?
OPENING STATEMENT OF HON. SUSAN A. DAVIS
Mrs. Davis. Thank you, Madam Chair, I appreciate being here
today. I have had an opportunity to serve with you briefly as
well, and Mr. Boozman, when I was on the Veterans' Affairs
Committee. I think it has become clear to us in speaking to
many of our veterans returning from Iraq and Afghanistan
particularly that they are looking and hopeful of beginning,
starting a small business with the skills that they bring back,
and so it is very important that we try and understand what
programs work. What are the best practices? How can we build on
those? And I am happy to be part of this today. Thank you.
OPENING STATEMENT OF HON. JOHN BOOZMAN
Mr. Boozman. Can I just mention, Madam Chairwoman, again, I
appreciate you having this because it is so important. As Ms.
Davis said, we have these people coming back, and I was an
optometrist. We had 80 or 90 employees prior to coming. And I
know how difficult it is to be a part of a small business, and
so, again, I appreciate it.
I know, in looking at some of the testimony and looking at
some of the, just some of the comments that we have had, I
think that it is fair to say that there is a level of
dissatisfaction and disappointment with TVC's performance, and
so, again, I am looking forward to the testimony and thank you
for your leadership.
[The prepared statement of Mr. Boozman appears on p. 54.]
Ms. Herseth Sandlin. Thank you, Mr. Boozman. I want to
welcome our panelists testifying before the Subcommittee today.
Let me introduce our first panel, joining us is Ms. Dawn
Halfaker, President and Chief Executive Officer of Halfaker and
Associates, LLC; Mr. Mark Gross, President and Chief Executive
Officer of Oak Grove Technologies; and Mr. Anthony Jimenez,
President and Chief Executive Officer of MicroTech, LLC.
STATEMENTS OF F. DAWN HALFAKER, OWNER / CHIEF EXECUTIVE
OFFICER, HALFAKER AND ASSOCIATES, LLC, WASHINGTON, DC; MARK
GROSS, PRESIDENT AND CHIEF EXECUTIVE OFFICER, OAK GROVE
TECHNOLOGIES, RALEIGH, NC; AND ANTHONY R. JIMENEZ, PRESIDENT
AND CHIEF EXECUTIVE OFFICER, MICROTECH, LLC, VIENNA, VA
Ms. Herseth Sandlin. Welcome to all of you. Thank you for
being here, and Ms. Halfaker, we will go ahead and begin with
your testimony. You are recognized for 5 minutes.
STATEMENT OF F. DAWN HALFAKER
Ms. Halfaker. Thank you. Chairwoman Herseth Sandlin,
Ranking Member Boozman and Subcommittee members. I greatly
appreciate the opportunity to testify at this hearing regarding
veteran entrepreneurship and self employment. And I am very
honored to represent a newer generation of entrepreneurs and
wounded war fighters, as I am an Operation Iraqi Freedom (OIF)
veteran. I am Captain Dawn Halfaker, retired, owner and CEO of
Halfaker and Associates. We are a woman-owned, service-
disabled, veteran-owned HUB Zone small business providing
national security consulting services to the Federal
Government. We are focused on mission support for the global
war on terror in the areas of force protection and anti-
terrorism homeland security emergency management and chem
biodefense operations.
I started the company in January 2006, a year and a half
after I was severely wounded in action in Iraq. As a result of
my injuries I lost my right arm at the shoulder, but even more
devastating, I lost my career as a military officer. Like most
of the wounded war fighters who are medically retired and off
active duty, I really didn't know what I wanted to do with my
career. But I knew that I wanted to remain close to the fight
and continue my service in some capacity.
As a business owner, my company enabled me to do just that.
I have the opportunity to use my military skills and expertise
to continue my service as well as the ability to work and
provide jobs for other veterans. My company competes for work
within the Federal Government, primarily DOD, and targets
contracting opportunities based not only on our capabilities
that I mentioned but also the ability to be able to hire
wounded veterans to perform the work that we get.
Since I began my business, we have realized a fair amount
of success early on. After a year and 5 months, we have gone
from one employee to 12 employees, and our projected revenue
through the end of calendar year 2007 is $2.5 million. We
currently have one prime contract and seven subcontracts and
are obviously pursuing a number of other opportunities.
With this, many times people have asked me how we have done
this so quickly and what resources we have used in our fair
amount of success. And my answer is always the same. Hard work.
And as you mentioned other veteran businessowners, I would just
like to point out some of the resources that have been so
useful to me. One of the individuals, who happens to be sitting
right next to me, and that is the CEO of Oak Grove
Technologies. I would just like to point this out because I
think it is very important to realize, as a young small
business owner, there are a lot of pitfalls that we can step
into and get bogged down with things that may seem like good
resources but in truth aren't really doing much to help us grow
our businesses and are somewhat of a distraction.
I would like to say that the best resources I have received
is the help I have gotten from people who are willing to lend
their time, their energy and their financial resources and give
them to me at my disposal. For example, Oak Grove Technologies
has been setting up my Web site absolutely free. Their only
contingency is that it doesn't look better than theirs. With
that said, there have been a number of other things that they
have helped out with. They have helped us get our financial
system in order, and they have given us a number of different
H.R. functions, paperwork, just different things that you don't
really know what you are getting into when you start a
business. So I would just like to point out that I think, as we
move forward and as we are looking for things that are very
valuable, I would just like to recognize the other service
members and veterans in the community for stepping up and
reaching out and really helping people like myself. And I think
it would be valuable to point out that this has been my most
efficient resource. I really have not received a lot of help in
any other aspect other than people in the community reaching
out to me and saying, this is what you need to do to be
successful. So I think it might be worth looking into some kind
of formal or informal program where other service-disabled,
veteran-owned businesses, small businesses are able to help
people like myself get started. I think it is basically taking
the mentor / protege model and looking at how successful that
has been and mainly looking at how we can implement that at a
lower level.
In sum, again, I would just like to say thank you for the
opportunity to be here. That is all I have.
[The prepared statement of Ms. Halfaker appears on p. 55.]
Ms. Herseth Sandlin. Thank you very much, Ms. Halfaker for
your testimony. Thank you for your service and for suggesting
areas that we will be pursuing, not only with the other panels
today but working with our staff and others that can evaluate
some of the recommendations that you have made through your
testimony.
Mr. Gross, thank you for being here. You are now recognized
for 5 minutes.
STATEMENT OF MARK GROSS
Mr. Gross. Good morning, Chairwoman Herseth Sandlin,
Ranking Member Boozman and members of the Subcommittee. First,
I want to thank everyone here for the invitation to come before
you today and share some of my experiences within the veteran
business community. I am a veteran of the United States Army. I
founded Oak Grove Technologies, which is a service-disabled,
veteran-owned company, 5 years ago this past August or this
coming August.
Today I am proud to say that I employ over 140 people. Over
70 percent of those employees are veterans, 16 percent of
disabled veterans. Geographically, we are dispersed in 16
States as well as supporting both Operation Enduring Freedom
(OEF) and OIF, both Iraq and Afghanistan. I am here today to
offer testimony on behalf of the business community and to
offer some of the benefits of some research and some opinions
that myself on the Veteran Business Advisory Committee has been
privy to.
The question before the Committee today is, what is the
state of veterans entrepreneurship, obstacles faced by aspiring
entrepreneurs, programs being relied upon by veterans and the
current status of Federally funded programs to assist veterans?
I feel that I am uniquely qualified to answer some of these
questions, as I have not only built a successful business in
this economic climate, but I have also taken on the task of
mentoring a number of other disabled veterans' companies. In my
opinion, Congress has done an outstanding job in passing
legislation, such as Public Laws 106-50 and 108-183, both of
which established programs for the disabled veteran Federal
goals and mandates in Federal contracting. Some of the problems
today revolve more around accountability within some of these
agencies and their willingness to make attempts to meet these
goals.
I am here to offer my views on what I think can be done to
ensure the state of veterans entrepreneurship within the
Federal Government.
Congress and this specific Committee have been working with
veteran businessowners for years. This issue is as important to
our veterans as it is to you. What we have seen, however, in
many agencies has been, frankly, a cavalier attitude toward
meeting this 3 percent goal. I believe that many agencies
believing that the mandate really doesn't apply to them.
In 2005 alone, the Department of Defense awarded 0.49
percent of contracts to disabled veterans' companies.
Department of Defense accounts for roughly 70 percent of all
government procurement spending, yet its repeated inability to
meet service-disabled veteran contracting goals make it all but
impossible for the other agencies as a whole to meet their 3
percent goal.
I would like to offer six recommendations on what can be
done in order to meet that goal. Some of the legislation--well,
one is eliminate the ``Rule of Two'' wherein a contracting
officer has to have two or more disabled veteran companies
before they can set aside a procurement. That is the only
statutory program that has that requirement. Both the 8(a)
program and HUB Zone program do not have that requirement to
create a level playingfield between the statutory programs by
changing the ``may'' to ``shall'' when using restricted
competition for service-disabled programs. Both the HUB Zone
and 8(a) program use shall be procured to those particular
socio-economic programs whereas in the disabled veteran
community, it is the contracting officer. They give them a lot
of latitude as far as ``may.''
Small business subcontracting plans, including all details
of the plans, required by large prime contractors should be
made public and accessible electronically upon request.
Mandate that contracting officers impose liquidated
damages, as predicated by the Federal Acquisition Regulation
(FAR) part 19.705-07 for those large companies that fail to
demonstrate a good faith effort to fulfill the requirement of
their subcontracting plan.
Close some of the loopholes in the GSA schedule FAR Part
eight wherein large businesses use small companies as fronts
and take away business that really was intended for some of the
small businesses.
And penalize agencies that don't make a reasonable effort
to maintain that, to meet that goal.
One of the--I can't speak very intelligently about many of
the Federal programs out there because, frankly, not many--I
haven't used many of them. One, I am aware of is The Veterans
Corporation (TVC), and I am quite familiar with them. We used
to be co-located in the same building in Alexandria, Virginia.
I frankly don't quite know really what they do. I had
looked to them back in 2003 for some assistance and really
didn't feel that there was a whole lot of assistance to be
offered to me at that time. I believe they do bonding and some
things like that, but none of which were my line of business.
On the other hand, I would like to recognize two agencies
that I feel do a great job as far as outreach, and that is the
Department of Veterans Affairs, and that is the Army Small
Business Office, both of which in my opinion have really taken
the lead as far as outreach to the community. We are proud to
be the first disabled veteran's small business in the DOD
Mentor Protege program that was created by Public Law 108-103,
and this year we were awarded the DOD's Nunn-Perry award for
small business growth.
As an entrepreneur and veteran, I think the climate
certainly has gotten a lot better than in the past 7 years. We
still have a long way to go, but I am confident that Congress,
many of the Federal Agencies, like the VA and the Army, are
committed to this cause. And with that, I would just like to
thank everyone for their time and all the efforts in improving
the economic climate for disabled-veteran small businesses.
[The prepared statement of Mr. Gross appears on p. 56.]
Ms. Herseth Sandlin. Thank you for your testimony, Mr.
Gross, and your insights and your participation in mentoring
other businessowners, in describing your experience with
different programs or lack thereof, based on how successful you
have been as well as maybe a lack of clarity about what some of
these programs can offer you, specifically. We will explore
that further as well.
Mr. Jimenez you are recognized for 5 minutes.
STATEMENT OF ANTHONY R. JIMENEZ
Mr. Jimenez. Good afternoon, Chairwoman Herseth Sandlin,
Ranking Member Boozman and Subcommittee members. It is a
privilege to be here today. I want to thank the Subcommittee
for allowing me to share my thoughts regarding veteran
entrepreneurship and, in particular, current programs funded by
the Federal Government that support businesses owned by
veterans.
I am CEO and president of MicroTech, which is a service-
disabled veteran-owned small business. I retired from the Army
approximately 4 years ago after serving 24 years. I started as
a private and ended as a Lieutenant Colonel and am confident
that the experience that I learned as a veteran can be applied
to the Federal Government as a contractor or subcontractor.
I would like to begin today by clearing up what I believe
to be a misconception about the primary obstacles facing
service-disabled veteran small businesses or SDVOSBs. My sense
is that there is a widely held belief that what service-
disabled veterans need most is access to training, capital and
other elements that support business development goals.
In response to these perceived needs, The Veterans
Corporation was created. The Veterans Corporation provides many
helpful tools for veterans looking to start a business, such as
help with business plans, advice about contracting with the
government, assistance obtaining financing and so on. And I am
sure this type of assistance is very valuable to many folks
starting new businesses and particularly by those that have
taken advantage of that.
But I do not believe that these are the primary factors
holding back business from veterans, especially well
established service-disabled veterans.
I believe that these companies are more in need of advocacy
and opportunity than they are in need of startup assistance and
support. In fact, right now, today, there are over 12,500
service-disabled, veteran-owned small businesses and 37,000
veteran-owned small businesses which have negotiated all the
hurdles required to become registered in the Contractor Central
Registry (CCR).
Based on my personal knowledge and experience, I believe
that the majority of these small businesses stand ready to
deliver quality solutions to the government today. I firmly
believe that what service-disabled veterans are in need of are
genuine opportunities. These are opportunities that allow them
to demonstrate and grow their capabilities.
To date, the government's record of identifying, setting
aside and awarding contracts to service-disabled veterans is
disappointing at best. The law mandates that the governmentwide
goal for participation and government awards to service-
disabled veterans is 3 percent of the total value of all
contracts awarded each year.
To date, the government has fallen far short of that goal.
Let's contrast the difference between the approximately 12,500
service-disabled veterans registered in the Central Contractor
Registry, the CCR, to that of the approximately 10,000 8(a)
small businesses registered. The legally mandated goals for
8(a) and service-disabled veterans are the same. And the
government consistently meets the requirements of setting 3
percent aside for 8(a) small businesses almost across the
board. What these circumstances translate into is a non-level
playing field for service-disabled, veteran-owned small
businesses. When you take DOD small business statistics for
year 2001 through 2005, you will find that the targets for both
8(a) and service-disabled veteran-owned small business spending
was over $31 billion each. The target was essentially met for
8(a)s. The amount awarded to service-disabled veterans was just
under $7 billion.
That represents a deficit of nearly $25 billion worth of
opportunities that were never afforded service-disabled
veteran-owned small businesses.
Despite this disparity and according to the U.S. Small
Business Administration (SBA), veteran entrepreneurs are
successfully self-employed at a higher rate than any other
group of American citizens. Imagine what service-disabled
veterans could do if they had the opportunities they
desperately need. We want to help create those opportunities
and we need your help. And I promise you that if you can
provide the opportunities, veterans will respond.
My other question is, why does this disparity of
opportunity occur, and what can we do about it? I believe there
are two factors, a lack of commitment to provide the mechanisms
for service-disabled veteran-owned small businesses to become
large businesses and a lack of knowledge of the current
perceptions about service-disabled veterans. Contracting
officers and their customers are simply not aware of the depth
and breadth of options available that service-disabled veterans
can provide.
I believe that many in government are reluctant to set
aside large complex efforts for service-disabled veteran-owned
small businesses for fear that the pool of respondents would be
too small or that the offerings would be too expensive or
noncompetitive. I believe this reluctance is also felt by the
general business community.
Large businesses will never partner with or mentor service-
disabled veterans if they perceive resistance on the part of
the government or if it seems the commitment to develop, grow
or mentor service-disabled veteran-owned small businesses is
not genuine. With respect to the service-disabled veterans'
ability to compete, I know from experience, it can be
significant. To win our second-largest contract, which is a
service-disabled veteran-owned small businesses set-aside, my
company had to compete against 50 other service-disabled
veteran-owned small businesses to win. We have successfully
completed our base year of performance and are now working in
our first option year, which is our second year of work. Our
customer is receiving top notch service at a very competitive
price and, having seen our capabilities first hand, understands
the value of setting aside opportunities for veterans and
service-disabled veterans.
We are also one of 44 companies to receive an award on the
U.S. General Services Administration, GSA, Veterans Technology
Services, VETS, Governmentwide Acquisition Contract (GWAC).
Over 200 service-disabled veterans bid on that opportunity in a
very competitive selection process.
Another outstanding example of veteran entrepreneurship is
the NASA SEWP contract, which stands for Solutions for
Enterprise-Wide Procurement. SEWP provides the latest in
information-technology products, IT products, for all of the
Federal Agencies. Until recently, SEWP had only large, small
and 8(a) businesses as primes. On May 1, 2007, with the award
of SEWP IV, six service-disabled veteran-owned small businesses
are now prime contractors on SEWP IV. That means the Federal
Agency now has the ability to procure the latest in IT products
from service-disabled veterans at a very competitive price.
This is where advocacy comes in. These success stories need
to be told. government program managers, contracting officers
and the business community at large should understand the
significance in supporting small businesses that are owned by
veterans. And they need to hear concrete examples of success
stories where businesses owned by veterans have delivered
excellent results. I think this type of educational advocacy
should become an important part of any charter for any Federal
programs that are funded by the Federal Government, such as The
Veterans Corporation
Another important resource that could help create
opportunities for service-disabled, veteran-owned small
businesses is a value that is gained when a large business
partners with a service-disabled, veteran-owned business. For
many years, there has been an 8(a) Mentor Protege program at
SBA that enhances the capabilities of 8(a)s to compete more
successfully for government contracts. The program encourages
private-sector relationships and expands SBA's efforts to
identify and respond to developmental needs of 8(a) clients.
Right now, there is nothing similar at the SBA for service-
disabled, veteran-owned small businesses.
I personally know these types of relationships work. Our
largest contract is with the VA where we provide enterprise
solutions for Microsoft products and associated services. We
are the prime on this contract, which is the largest contract
ever awarded to a service-disabled veteran-owned small
business. Our first award was $56 million. The VA contract
would have never happened if it hadn't been for VA's Office of
Information and Technology and in particular Mr. Craig
Niedermeier and Mr. Dan Nascimento and all of the great people
in their offices that worked so hard to provide more
opportunities for service-disabled veterans. This contract is
an example of VA's commitment to service-disabled, veteran-
owned small businesses.
Once potential service-disabled, veteran-owned small
business bidders were identified each identified business
worked hand in hand with the Microsoft Federal team made up of
Brian Roach, Geary Brummell and Marc MacDonald, and each one
was paired with a large account reseller so that they could put
in a number of competitive bids. Many companies worked
together, and we in particular worked with Software Spectrum,
who understood the need to mentor and assist service-disabled,
veteran-owned small businesses. And they continue to do so
today.
We have expanded that relationship, and we are picking up
skill transfer and knowledge transfer, which is essential for
our growth. We completed our base year of performance earlier
this month, and we are now in our first option year, and VA is
receiving top notch products and services at a very competitive
price.
They--the VA are very pleased with our services and our
process for delivering products and solutions. This contract
continues to be a sterling example of what can happen when big
business works with small business to create business
opportunities, especially for service-disabled, veteran-owned
small businesses.
I hope that my words have provided additional insight into
veteran entrepreneurship and, in particular, the need to define
the mission of current programs funded by the Federal
Government. With the right focus, many of these programs can
serve as opportunity advocates and can help ensure businesses
owned by veterans have the opportunities they need to be
successful.
I am convinced that the harder the government works to
identify opportunities for veterans, the more success stories
there will be. Thank you.
[The prepared statement of Mr. Jimenez appears on p. 57.]
Ms. Herseth Sandlin. Thank you, Mr. Jimenez
We have been joined by two other members of the
Subcommittee, Mr. McNerney of California and Mr. Hall of New
York.
I have a couple of initial questions, and then I am going
to defer to the Ranking Member and the other members who have
joined us here in the Subcommittee today for questions.
Ms. Halfaker, let me just probe a little bit more on how
you got started. You talked about Mr. Gross and his help and
other's who are service-connected disabled veteran who own
their own businesses or other veterans who may not be service-
connected disabled but who are businessowners and the help they
provided.
Did the Small Business Administration, the Center For
Veterans Enterprise (CVE) or The Veterans Corporation assist
you in any way in getting your business started? Was Mr. Gross
part of the network of any of these three entities?
Ms. Halfaker. Madam Chairwoman, when I first started my
business, I didn't know what any of those organizations were.
The first interaction that I had, in terms of becoming a
business owner and realizing that there were actually resources
out there, was probably through the SBA, just in going to their
Web site and then initially meeting with a Score counselor at
the SBA. And that was a very limited interaction. I paid, I
think it was $40 and went to one class and realized that I was
wasting my time. And that is not to say anything about the SBA
it is just, I think I was already at a point where I needed, I
was a little bit more aggressive and needed some additional
help other than the very basic resources that they were
providing.
So I continued to look and find other resources and tried
to figure out how I was going to be able to accelerate the
point my business was at and get to where I wanted to be
quicker and attain my goals in terms of doing business with the
government.
In terms of the other organizations you mentioned, the only
other interactions I have had are subsequent to starting my
business and having really been already running it for about a
year. I would say it wasn't until maybe January of this year, a
year after I started, when I really got involved with this
community and obviously was introduced to Mr. Gross and started
working with him, and then he also brought me into the
community and introduced me to some other individuals.
Since that time, I have met with some members from Veterans
Corporation They instructed me that they do have financial
resources that they could help me get access to so I might
pursue that. I haven't decided yet. But just exploring my
options and learning, still learning what is out there.
Ms. Herseth Sandlin. You established your business and it
has been up and running for about a year, and it is now an
established business. You just described what The Veterans
Corporation offered as relating to financing opportunities and
the financial resources. Do you agree with Mr. Jimenez that the
best help for you at this stage, now that your business is
established, that to grow your business is the advocacy and the
opportunity factors versus the training and other assistance,
such as financial assistance?
Or do you think, since it is a fairly new business, that
you still need access to some of the training and the other
assistance in addition to advocacy and opportunity?
Ms. Halfaker. Madam Chairwoman, I would say that it is a
little bit of both. I believe that my business--first of all, I
do agree, to answer your question, with Mr. Jimenez, and my
business being a year and a half old is still at the point
where we can benefit tremendously from some mentorship. But
that mentorship, from what I have experienced, comes from a
trusted partner, somebody who, you know, you leave the service
and there is an element of trust. You are used to being in an
environment with people who basically would do anything for
your life, and you go into a business environment, and it is a,
I would say, a completely different kind of combat, and you
don't know who you can trust. There are a lot of different
avenues you can go down. There are so many resources out there
that it is very confusing. And the worst thing for a business--
and I think some somebody mentioned this already--is to waste
your time with something that is not going to ever help you
grow your business. So, that said, I think that there are
resources out there, but I found the most effective resources
to be other businesses, and I do agree with Mr. Jimenez
Ms. Herseth Sandlin. Thank you.
Mr. Boozman.
Mr. Boozman. Thank you, Madam Chairwoman. I think one of
you all mentioned that the climate seems to be a little bit
better now than it was, and certainly this Subcommittee, in a
very bipartisan way, has really been working on that, and it
seems like in dealing with the agencies involved, that in some
cases you were having a little bit of success.
That being said though--and all of you have seem to run
across a little bit of an attitude with various procurement
officers. I think in your testimony, Ms. Halfaker, you talk
about being some place and somebody saying you and everybody
else as far as the veterans' set-aside, Mr. Jimenez and Mr.
Gross also, mentioned similar types of things.
So I guess something that--and again, we can talk about
this, Madam Chairwoman--but I would really like to have some
procurement officers over here and maybe get some of those that
are doing a good job that seem to have figured this out because
my experience is that, for the most part, these are good folks
that are working hard. However, sometimes they don't have the
understanding of how to make it work where it is just easier to
do it the way it has always been done so if we can, again, we
will visit but if we could have a round table or something, and
talk about maybe some of the men and women that are doing a
good job of that, their experiences, some of you, that have
done a good job of playing that game, I think that would be
valuable.
Very quickly, one of the things that we are trying to do is
bring the GI Bill up in the sense of getting it into the 21st
century. Do you in your experiences of getting education for
the businesses that you are in or continuing education, is
there anything you have run across that maybe helped or was a
hindrance? Perhaps we can work on in that aspect also with the
entrepreneurship?
For instance, one of the things we are trying to do is
front load, some of the short courses, trust, don't go as long,
front load the GI Bill to that sort of thing so you can go
ahead and get the payment versus--go ahead.
Mr. Gross. For me, the GI Bill, the GI Bill actually paid
for my education. So the GI Bill worked very well for me. I
believe that, you know, giving folks the opportunities GI Bill
funds for, you know, for educational purposes that may not be,
you know, pursuing a bachelor degree or that sort of thing I
think would be very valuable. So I think using the GI Bill
funds for training and some mentorship that sort of thing, I
think the question then becomes, what organization is going to
provide that?
Mr. Jimenez. Sir, if I may, I often referred to myself in
the Army as the poster child for the GI Bill. I came from a
very modest family. Neither of my parents were college
graduates. In fact, neither were high school graduates. They
didn't get their GEDs until late in life. And they didn't have
the means to pay for college, so we had one of two options;
either be very smart or be very good at sports. I was neither,
so I found myself leaning more toward the military. And
fortunately for me, they liked me as much as I liked them. And
I was able to benefit from the GI Bill, which today I sit here
with two master's degrees and a ton of experience and education
that I owe to the Federal Government, to the U.S. Army in
particular for having sent me to school on the GI Bill, and
more importantly the guidance that I received from both the
Army and the VA in how to best utilize my benefits. And I
utilized the heck out of them.
I never have ever paid for any education, which I find
shocking to this day; yet I was able to rise from Private E1 in
the Army to Lieutenant Colonel O5 in the Army, and I went from
being responsible for nothing to ultimately everything. My last
job prior to leaving was the program director of eArmy U, and
here I was a guy who started out with no degree to managing a
program that educated 45,000 soldiers. I thought it was just a
phenomenal opportunity to show the great things that could
happen. And I continue to think that even though there are
disadvantages to serving in the military, the advantages far
outweigh the disadvantages. It was an eye opener for me.
And it provided me with a business foundation I desperately
needed to be successful. Had I not gotten that education and
been able to take advantage of those benefits, I probably would
have returned back to the neighborhood where I surely would not
have been as successful.
Mr. Boozman. Thank you, Madam Chairman, and thanks to the
panel.
Ms. Herseth Sandlin. Thank you.
Ms. Halfaker, did you want to take an opportunity to
respond to Mr. Boozman's question? You don't need to. I just
wanted to make sure I gave you the opportunity despite time
being--okay, all right, I do want to now recognize Mr. McNerney
for any opening statement or questions for the panel.
Mr. McNerney. Thank you, Madam Chairman.
I don't have an opening statement. I do have some
questions.
Mr. Gross, I was delighted to hear you say that the VA,
along with the Army Small Business Department,were very helpful
to you. Could you answer fairly directly, without the SBA,
would you have been able to start a business? Without the SBA,
CVE and TVC, would you have been able to start a business?
Mr. Gross. Well, CVE is part of VA, so, actually, I,
frankly, relied on CVE early on quite a bit. So, you know, they
kept a calendar of all procurement opportunity conferences and
that sort of thing. So I did rely on CVE.
Mr. McNerney. And they helped you develop a business plan?
Mr. Gross. I wrote my own business plan. They didn't help
me write a business plan, but it was a good place to go for
outreach as far as the future procurement opportunities. And I
will say and I know CVE has done a lot for me where they have
provided outreach and brought the program managers from
different VA opportunities and linked them up with contractors
like myself to do direct capability briefings and so CVE has
been helpful to me. SBA and TVC, I, frankly, haven't really
gone to them, so I can't comment one way or the other.
Mr. McNerney. Okay, thank you.
Mr. Jimenez, you are pretty blunt about lack of commitment
being a big problem. And could you expand whether that is just
the 3 percent, or is it also a lack of commitment from people
within the administration?
Mr. Jimenez. Sir, I think it would be safe to say and I
think probably just to give you kind of an idea of my--and I
won't call it a tainted view--but my view as a business owner
is that I was in the procurement business in the Army and found
it extremely difficult to get the flow down of information you
needed about changes in the FAR and new legislation.
What I found when I got out was that I was much more
educated than many of the folks I was going to visit that were
responsible for procurement and in particular changes to the
procurement law. What I found was that, every time I walked in,
I would have to educate contracting officers, program managers,
folks who were responsible for opportunities and providing
those opportunities in the Federal Government.
It was an education process. And the education process was
extremely difficult, trying to make them understand what the
difference was, what a veteran was, what a service-disabled
veteran-owned small business was, what the difference was
between 8(a) and service-disabled veteran small business and
what were some of the laws or FAR clauses that would allow them
to be able to provide me an opportunity to compete.
What I honestly believe is happening now is contracting
officers, like many other folks in the Federal Government, are
overworked, and they are more concerned at this point about
providing satisfaction for the Federal Government by procuring
what they can at the best cost. So the additional burden of
having to provide opportunities to certain socio-economic type
groups is creating a problem for many of them, and many of them
just aren't interested in doing that.
I think the education process has been significant, but
what I think would help that is to have somebody letting them
know that they are being checked on, that it is down to the
lower level. It seems to me that it reaches to the agency
level, and the agency is responsible for announcing, we have
met our goals or we haven't met our goals, but there is nobody
at the top of the agency serving as the advocate for many of
the agencies.
And exceptions obviously are the U.S. Army and Veterans
Affairs and GSA where folks there have advocacy at the very
top. Unfortunately, the other agencies, they almost seem to be
absent landlords when it comes to taking care of service-
disabled veterans. You tell them. You speak with them. You meet
with them. You explain the advantages of contracting with the
service-disabled veteran. Some of the opportunities, even in my
case, some of the vehicles that I have, you plead with them.
You respond to sources sought. You respond to Requests for
Information (RFIs), and yet you don't see anything.
And what I desperately need is somebody besides myself--an
advocate at these agencies saying, we will provide
opportunities for service-disabled veterans. I have been
empowered. I am going to go down and tell contracting officers.
And many of the small business offices just don't have the
resources to be able to do that. And that is where I think that
agencies that are funded, such as TVC, might be able to assist
in that by maybe at least being a watchdog group in the sense
of who is going, well, who is not doing well; why haven't you
turned this into a service-disabled veterans set-aside; this is
a good fit; this would be a good opportunity for a service-
disabled veteran.
And aside from some of the small business offices, I happen
to be a big fan of the CVE. I think they do a great job within
the VA of being that voice I just described. And I am not
saying it because Mr. Denniston is sitting behind me, but he
has been a friend to service-disabled veterans since the day I
started my business, and he has been a friend to me. He does it
in a very of agnostic process in that he provides opportunities
for all service-disabled veterans, and we all get a chance to
compete, and they are coming very fast but VA is just one
agency. The Army is just one agency.
The other agencies, unfortunately--GSA is a great agency--
the other agencies, we have difficulty getting them to
acknowledge that service-disabled veterans are meaningful in
the small business relationship piece.
Mr. McNerney. Very informative answer. Thank you.
Ms. Herseth Sandlin. Thank you, Mr. McNerney.
Mr. Hall, do you have questions or an opening statement?
Mr. Hall. Thank you, Madam Chair.
I have questions. And first of all, thanks to all three of
our panelists for your service and for your continuing service
now and for coming here and sharing your experience and your
observations with us.
And, Mr. Jimenez, I couldn't help but thinking, as you told
your story of where you have come from and where you are now
and your masters degrees and your success in businesses and so
on, it is too bad it doesn't fit into a 30-second commercial.
Very inspiring. It is kind of like the advertising slogan, ``Be
All That You Can Be,'' but really expounded upon. And I think
it would be good for a lot of people to hear your comments
about the advantages of being in the service far outweighing
the disadvantages. And this goes for all of you, but especially
the way you described it, Mr. Jimenez, your initiative and
energy and accomplishing those things. It was nice that the
opportunities were there. But it takes personal fortitude to
take advantage of them so.
Ms. Halfaker, I just want to ask you, in terms of achieving
the 3 percent goal--I think this question maybe all three of
you can answer if you like--how can we help that goal be
achieved? Would an ombudsman represent veterans with all the
different agencies that you might seek to procure contracts or
compete for contracts with, is that an idea that might be worth
something and any of the suggestions to make sure that fair and
equal consideration is given to those veterans and that
procurement officers are not, either because they are so busy
or because of the way things have always been done or whatever
reason, that they don't overlook the importance of our veterans
having this opportunity? It is a long question, but answer it
however you like.
Ms. Halfaker first.
Ms. Halfaker. Yes. I would just like to comment that I do
believe that there is certainly an accountability issue that
has already been brought up, and maybe it is a lack of
resources from the side of the procuring officers and the
contracting officers. But I think if there was just--there is a
systemic problem, though. And it is a lack of caring on their
part, and it is permeating, I think, you know, through many of
the agencies and the agencies I have had experience with,
particularly even the Navy, which I mean that just shouldn't
happen. These are our own people. And I have run into a couple
of different situations personally where people have just
downright told me we don't care; how does this affect me? And
it is simply a matter because it doesn't affect them because
there is no negative reinforcement or repercussions when they
don't do the right thing and they don't follow the rules.
So I guess I would just like to say that any kind of
support that anybody can give would be helpful because I think
that, you know, even if there is not--I do believe that there
has to be some kind of consequence. But even if there isn't,
just to show you guys just being here shows a tremendous amount
of support but even taking that a step further and putting your
name on something I think is really taking the first step in
saying this is important and taking care of our veterans,
veteran businessowners, is important.
Mr. Hall. Perhaps one idea might be to fence off or to
quarantine that 3 percent of the budget until it is used for
veterans' projects or unless it can be proven that no veterans
have applied for those, have bid for those projects.
Mr. Gross. I think that is a great idea. You know, I think
there needs to be a, you know, a reward / penalty program. I
think we need to reward those who are making an effort and who
are advocating, and penalize with budget those who don't.
Mr. Hall. Any thoughts on the idea of an ombudsman to keep
an eye on all the different agencies?
Mr. Gross. Well, I think we start at the Office of Federal
Procurement Policy (OFPP). Start there.
Mr. Hall. They are supposed to be doing that?
Mr. Gross. Right.
Mr. Jimenez. Sir, I agree with both Mr. Gross and Ms.
Halfaker in that I--they bring up some very good points. We are
not going to be able to change the mindset of people. They
believe what they believe, and some will see value and some
won't, no matter how much you confuse them with the facts.
I think the ombudsman is a good idea. But I think Mr. Gross
just made an important point, and that is that the Office of
Federal Procurement Policy has the ability to do something very
similar--I am assuming, and I have not worked there, and I am
not up on what capabilities they might have or what they might
not have. But it would seem to me that if they in fact are the
policy branch that would provide that, that that would be a
good place to put somebody, but more importantly, I think that
if the dollars were fenced off and if I, as a contracting
officer, knew that if I used those dollars for service-disabled
veterans, that provides me with the opportunity to provide
opportunity to service-disabled veterans; and that if I don't,
I leave money on the table when money is tight; I think that
would be would go a very long way to providing opportunities
for veterans and service-disabled veterans.
I think the ombudsman is a good idea, but without the
ability to actually go in and provide penalties or to enforce
the legislation that is presently in place, I think it would
just be another position that unfortunately would be powerless
to make changes.
Mr. Hall. Thank you, Madam Chair.
Ms. Herseth Sandlin. Thank you, Mr. Hall, and we will
follow up with you on some of the ideas that you are so gifted
in generating in our hearings.
Ms. Davis do you have questions for the panel?
Mrs. Davis. Thank you, Madam Chair, and again, thank you
for holding this hearing. As someone who has been an advocate I
would say for The Veterans Corporation and some of the good
work that they do, I am really interested in what you had to
say. And I know that, through the course of the hearing, we
will have an opportunity to talk to a number of different
entities that are very involved with trying to provide those
kinds of opportunities.
But I would say, Madam Chair, I would certainly, certainly
endorse my colleague's point of view in terms of, how could you
do that? Money talks, we all know that. And so if there is some
way within the procurement area or others that you can provide
incentives for those who would get credit for having
established a track record for helping service-disabled
veterans, I think that would be significant.
It may be that, you know, there is a contract here and
there, but what we are looking for is those who are strong
advocates, put their energy and their investment of time and
resources into providing that and really establishing all the
poster companies I think that grow out of this. So I would hope
that perhaps we could look at that.
But I wanted to see--you mentioned The Veterans
Corporation. How do you see them as either providing the
monitoring, the oversight that you think could be a stronger
part of their role?
Mr. Jimenez. And I have talked to Mr. Blackwell, ma'am, on
this subject. I think he has a great organization. I think he
is a great advocate. Unfortunately, I don't think that he has
that charter or the ability to go out and do the things that I
as an established small business need for him to do for me. And
that is, when he shows up and asks, why is this set-aside not a
service-disabled set-aside, or why is this small business set-
aside not a service-disabled set-aside, or why is this large
business opportunity not a set-aside; the first question is,
who are you, and the second question is because we don't want
to.
I think if Mr. Blackwell were given the opportunity,
perhaps through a charter or some way, I think he would be able
to do that quite effectively, and I think a number of folks
would. But he is in the same situation. Without tools and
enforcement, there is just not much anybody is going to be able
to do.
Mrs. Davis. If I could follow up quickly just in terms of
policies. Are there policies in contracting, such as bundling
jobs, that you think get in the way of this as well? I know, I
am from San Diego, and we have a number of small businesses
that are very frustrated often because they don't hear about
the jobs or it is very difficult for them engage in the
process.
Mr. Jimenez. I think the government has done a much better
job particularly in the last 3 or 4 years of not doing the
bundling. However, I am concerned about the fact that sometimes
bundling does leave service-disabled veterans out in the cold.
And more importantly, what I find is the problem that comes
with bundling is not that it exists but that nobody goes in
when there is a large corporation and says, we intend to do 20
percent small business, make a small business plan that
includes 20 percent service-disabled, 20 percent 8(a) or small
business, and they don't do it. And when they don't do it,
nobody does anything about it. There are no penalties. There
are no liquidated damages. And more importantly, nobody knows
because there is nobody that has the ability to check.
So, first off, we have to identify that, in fact, didn't
happen; that somebody said they were going to give business to
small business or to service-disabled veterans or 8(a) or
woman-owned or HUB Zone, and when they didn't, somebody did
something about it.
Mrs. Davis. Would you either of you like to comment?
Mr. Gross. That is a big problem today. Many of the larger
procurements, when the larger companies--I believe the
threshold is $500,000 or greater--they are required to provide
in their proposal a small business subcontracting plan. When,
you know--and I myself have gone through this. You know, you
put a lot of time and effort into a bid and proposal dollars
into, you know, going after an opportunity with the company.
They win, and they give you nothing, and there is not a whole
lot you can do. There is really--now that contracting officer
has the ability within the FAR to assess liquidated damages
against that contractor. But it is hardly ever done.
Mrs. Davis. Thank you. I guess the other question would be,
quickly, how many people or how many positions do we have that
are serving as enforcement in this area and really monitoring
to see what is happening? Thank you.
Mr. Gross. I don't believe there are any. I know SBA, I
will say, they have the ability. And I have used the PCRs,
which is the Procurement Contracting Representatives. They have
the ability to help out in the field. But they are hard to get
to. And like anything else, some are better than others.
Mrs. Davis. Thank you very much.
Thank you, Madam Chairwoman.
Ms. Herseth Sandlin. Thank you, Ms. Davis, for joining us
and for your questions. Mr. Boozman, do you have follow up
questions for the panel?
I have just a couple because we have two more panels, and
just a couple of observations. I think Mr. Boozman makes a
strong recommendation that we do need to follow-up and invite
others that are procurement officers, perhaps someone from the
Office of Federal Procurement Policy, perhaps someone
specifically from the SBA to address the enforcement issue. I
also think, as Mr. Jimenez said, and I think you are
particularly well situated to serve as an advocate given your
years as a procurement officer as well within the Army, that
maybe we need to address this in two different ways; someone at
the head of each agency that is responsible as an advocate, but
then an overall sort of watch dog group where there is an
enforcement mechanism built in and that we are ensuring an
adequate number of FTEs to do that either within an agency or
within an umbrella group.
That does go to the issue of accountability that, Mr.
Gross, you mentioned at the beginning. Where is the
accountability within the agencies and the willingness to take
on the congressional objectives that we have stated? It seems
where there have been successes when you have an entity like
CVE within VA that is serving in that advocacy role.
One thing that you had mentioned, Mr. Gross, was the issue
of some larger companies using small companies as a front. I
have heard this from other small businessowners that I
represent in South Dakota. Have you filed complaints? Do you
work with SBA? Is there still the lack of an identified
enforcement mechanism to address this issue?
Mr. Gross. Well, it is, frankly, it is just a loophole in
the process, in the reporting process, so like with the GSA
schedules, if a company like myself has a GSA schedule, you
know, agencies will target you, but the FAR Part 19 rules don't
apply on the GSA schedule, so what happens is--and this is a
good example--if I was pursuing an opportunity with Department
of Army, and it was a contract to provide 10 people, if they
set it aside as a small business set-aside, I maintain 51
percent of that contract. Well, 51 percent really gives you
control.
Using the GSA schedule, what they will do is they will take
a large contractor, use your vehicle; you may get one position
and the large contractor gets nine. Well, clearly you have zero
control. But the agency gets 100 percent credit for small
business, and they take the credit for the socio-economic
program, too, under the GSA schedule.
And so when I have run into that myself, I called the
contracting officer and said, hey, look, in the spirit of the
program, this isn't the right thing to do. And he said, well, I
understand, but it gives me the credit, and it is an easy way
to do it. And the GSA reporting, online reporting, provides
that to him, so he is not going to do anything that is
technically wrong.
Ms. Herseth Sandlin. Well, thank you, again, for your
insights. There are a number of areas that I think many members
of the Subcommittee, again, working with our staff and with
you, would like to follow up on and get some concrete proposals
on how we can either get rid of loopholes, how we can look at
changes to charters, how we can look at accountability through
an incentives and penalization process to meet the 3 percent
requirement. As we vet some of these proposals and develop them
further, we may very well be looking to you in a more informal
basis to help these ideas percolate even further.
I thank all of you for your testimony. I will now invite
the second panel to the witness table.
Let me thank each and every one of you for your service to
the country, your years in the Army. You were with the Army, as
well, Ms. Halfaker?
Ms. Halfaker. Yes.
Ms. Herseth Sandlin. Thank you all for that service and for
what you are doing now to create jobs, particularly for
veterans and particularly service-disabled veterans that you
employ.
Panel two, as they make their way up to the table, let me
introduce them to the Subcommittee and our guests in the
audience today.
We have Mr. Joe Wynn, President of the Veterans Enterprise
Training and Service Group, Incorporated; Mr. Joseph Sharpe,
Deputy Director for the Economic Commission of the American
Legion; and Mr. Richard Weidman, Executive Director for Policy
and government Affairs for the Vietnam Veterans of America. I
welcome all of you back to the Subcommittee. We look forward to
your testimony.
STATEMENTS OF JOE WYNN, PRESIDENT, VETERANS ENTERPRISE TRAINING
AND SERVICE GROUP, INC. (VETS GROUP), AND MEMBER, VETERANS
ENTREPRENEURSHIP TASK FORCE (VET-FORCE); JOSEPH C. SHARPE, JR.,
DEPUTY DIRECTOR, ECONOMIC COMMISSION, AMERICAN LEGION; AND
RICHARD F. WEIDMAN, EXECUTIVE DIRECTOR FOR POLICY AND
GOVERNMENT AFFAIRS, VIETNAM VETERANS OF AMERICA
Ms. Herseth Sandlin. Mr. Wynn, why don't we start with you
this afternoon on this panel. You are recognized for 5 minutes.
STATEMENT OF JOE WYNN
Mr. Wynn. Good afternoon, Chairwoman Herseth Sandlin,
Ranking Member Boozman and distinguished members of the
Subcommittee.
Let me first thank you for the opportunity to come before
you today to share some of my views and the collective views of
many veterans and service-disabled veteran businessowners,
veterans who served with honor and many who received
distinguished honors for displaying valor and courage during
their periods of military service.
Though my time of service was many years ago, as a veteran
of the U.S. Air Force with the 66th Strategic Missile Squadron,
I still have a very vivid memory of the military experience. As
a lifetime Member of the National Association for Black
Veterans, I have spent the past 16 years or more assisting
veterans and, in recent years, serving as a Commissioner of the
congressionally appointed Veterans Disability Benefits
Commission, Treasurer for the Veterans Entrepreneurship Task
Force, and as President of the Veterans Enterprise Training and
Services Group, referred to as the ``VETS Group,'' which is a
nonprofit, community-based organization providing supportive
services to veterans seeking to start or expand their own small
businesses.
Since the Vietnam era, America has been involved in
numerous conflicts, missions and peacekeeping endeavors, and
since the tragedy that overtook America on September 11, 2001,
we are still engaged in the global war on terrorism, primarily
in Iraq and Afghanistan where the death toll continues to rise
despite the best efforts to end this ordeal.
Now a new generation of veterans exists. They are well-
trained, loyal, battle-tested, and underemployed. Those who
return with loss of limbs, mental disorders and / or other
severe disabilities face the greatest challenges of all.
In the past few months, since the difficulties of service
members' transitioning from their active duty military under
the DOD, Department of Defense, system through the Walter Reed
Army Medical Center into the VA system have come to light, it
is now evident that we have been unsuccessful in providing the
originally promised assistance our veterans have earned,
deserve and require so that they would have the opportunity to
be as successful in their civilian pursuits as they were in
their military assignments.
I commend this 110th Congress and its leadership for rising
to the occasion from both sides of the aisle, as evidenced by
the many hearings, round table discussions and over 200 pieces
of legislation related to veterans introduced in your first 5
months. Some have already passed the House or Senate, but only
a few have been directed toward veterans entrepreneurship,
which is the focus of this hearing today.
So let me summarize my views on this topic, relative to the
assistance veterans have to work with, in my remaining few
minutes, though I hope that a more detailed discussion of the
issues will be considered before actions are taken.
If veterans and service-disabled, veteran-owned businesses
are to succeed, it will more than likely take place in the
public sector where there are trillions of dollars in contract
opportunities from a multitude of goods and services. But
veteran businesses will have to overcome a number of
impediments, some of which are resistant to change across all
agencies--no enforcement of prime subcontracting plans,
inaccurate agency data, miscodings, double counting, and the
perception that procurements are based on just who you know and
that the pie for small businesses is shrinking, not to mention
there is contract bundling.
As we all know, two major pieces of legislation really set
the stage for the emergence of today's veteran entrepreneurs.
You, Congress, did an excellent job of laying the foundation
for veterans entrepreneurship to succeed in America when you
passed the Veterans Entrepreneurship and Small Business
Development Act 1999, referred to as Public Law 106-50. Public
Law 106-50 also created some new entities and the restructuring
of some existing ones in order to assist veterans in pursuit of
entrepreneurship. These three entities were the Small Business
Administration's Office of Veterans Business Development, the
VA Center for Veterans Enterprise, and the National Veterans
Business Development Corporation.
There was another piece of legislation that came later,
Public Law 108-183, which essentially made it mandatory that
agencies and prime contractors procure a minimum of 3 percent--
it made it mandatory to procure a 3 percent minimum of goods
and services from service-disabled, veteran-owned businesses.
Following that, we also had Executive Order 13360, which
many of you are familiar with now, which essentially directed
agencies to carry out the laws that previously came before it,
but of the three government entities created to deal with this
situation, The Veterans Corporation appears to be somewhat
misdirected.
The Office of Veterans Business Development is still buried
in the shadows of the Small Business Administration, while the
Center for Veterans Enterprise is continuing to show some
promise. These entities should collectively be assisting in
identifying and registering the capabilities of veteran
businessowners, developing relationships with agency
procurement officers, matching veteran businesses with prime
and subcontracting opportunities, expanding the pool of capable
and qualified veteran-owned small businesses, while alleviating
barriers to discrimination and demanding that agencies follow
the law.
Much has been said about the seemingly poor performance of
the National Veterans Business Development Corporation. Let me
just say that, in essence, the heart of the matter seems to
come down to the amount of appropriations received over a short
number of years, some $14-plus million, with no contracts for
service-disabled veterans to really speak of.
Bottom line, a business has to get business to survive. So
we can count Web sites, hits on a Web site, we can talk about
the number of contact visits, we can talk about the number of
training sessions; but the bottom line is, businesses have to
get some contracts.
Many veterans still do not know that The Veterans
Corporation even exists, and this may be partly because of the
facility and the location, where they are. There is no really
visible, public way for people to know that it is located
there. It would be nice at some point, though, if that
particular organization had a portion that was open to the
public wherein it could have a state-of-the-art facility where
veterans could come and learn about small business and exchange
information and network with other small businessowners.
Right now, it seems as though The Veterans Corporation
provides duplicative services and limited funding for four
Veterans Business Resource Centers. Now, these services and
centers are needed, but it is just that we also have 1,400
other small business centers operated by the Small Business
Development Center, each having access to Web sites, and most
are affiliated with colleges and universities. We also have
access to one-on-one counseling, training, workshops, and
seminars through the Procurement Technical Assistance Centers,
which are located throughout the country.
There is also a lack of Federal contracting assistance for
veteran businessowners, and this has been a major issue because
as you heard from some of the witnesses on the first panel, the
real issue with the veterans and contracting right now is with
the Federal marketplace; and unless we have a true advocate
that is actually speaking up on behalf of the veterans in the
Federal marketplace, it continues to be very difficult for
veterans to move forward and receive the contracts that they
deserve.
It was thought in the beginning, when TVC was first
founded, that it would, in fact, be that national veterans
advocate for veteran businessowners, particularly in light of
the fact that their board of directors is appointed by the
President. It was thought that this organization would be able
to go head-to-head with agency heads throughout the government,
speaking on behalf of veteran businessowners.
Let me just move quickly to a couple of comments about the
Office of Veterans Business Development under the SBA.
Ms. Herseth Sandlin. Mr. Wynn, if you could, just wrap up
within about another minute as they are going to call votes on
us probably; and I would like to get through the other two
witnesses' testimonies before we may have to go.
Mr. Wynn. I sure will.
I will just quickly say that the Office of Veterans
Business Development has been doing a tremendous job with
limited resources to reach out to veterans here. Recently, they
expanded their staff to include an experienced person to help
with Federal contracting.
As far as the Center for Veterans Enterprise is concerned,
they have been doing a tremendous job as well. As you know,
they also maintain the database for veteran businessowners, and
they have been doing a tremendous job of outreach to veterans
in the community in terms of helping them understand and
navigate the Federal marketplace.
Let me, just on that note, mention that, while we applaud
the VA with becoming the first Federal agency soon to implement
legislation that will prioritize the use of service-disabled
veterans and veterans in Federal contracting, we still need to
better understand the role that CVE plays in relationship to
the Office of Small Business and Disadvantaged Business
Utilization under the VA. They work together, and there are
still some aspects of that that would be helpful. That can
conclude my statement.
Thank you.
[The prepared statement of Mr. Wynn appears on p. 60.]
Ms. Herseth Sandlin. Thank you, Mr. Wynn.
I would just remind all of our witnesses on this panel and
the next one that your full statements will be made part of the
record, and I never like interrupting anyone in their
statement. Given that we have just gotten notice that there may
be votes, I just wanted to make sure that we were able to get
through the testimony of the other two panelists.
Mr. Wynn, I appreciate all of the recommendations that you
included in your full statement, and we will be taking a very
close look at those in addition to those that you articulated
in the last few minutes.
Let me now move to Mr. Sharpe. You have 5 minutes for your
opening statement.
STATEMENT OF JOSEPH C. SHARPE, JR.
Mr. Sharpe. Madam Chairman and members of the Subcommittee,
I appreciate this opportunity to share the views of the
American Legion on the state of veterans entrepreneurship and
self-employment, obstacles faced by veterans, and the programs
they rely on.
The American Legion views small business as the backbone of
the American economy. It is the mobilizing force behind
America's past economic growth and will continue to be the
major factor as we move well into the 21st century.
Presently, more than nine out of every ten businesses are
small firms which produce approximately half of the gross
national product. Currently, over one-half of the Nation's work
force is employed by a small business with the average company
employing approximately 11 persons. Small businesses create, by
some estimates, 60 to 80 percent of all net new jobs, thereby
providing an essential element for strong economic growth.
Government should assist in the creation of new jobs by
encouraging qualified entrepreneurs to start and expand their
small businesses. No group is better qualified or deserving of
this type of assistance than our veterans. Congress enacted the
Veterans Entrepreneurship and Small Business Development Act
1999, Public Law 106-50, to assist veteran and service-
connected-disabled, veteran-owned businesses by creating the
National Veterans Business Development Corporation.
In the beginning of its inception, The Veterans Corporation
created a veterans entrepreneur training program to promote and
foster successful veteran entrepreneurship within the veteran
business community, but this program no longer operates.
Currently, the organization's main efforts have been to provide
distance-learning education, veteran entrepreneur training in
how to start and expand their own businesses, to include
training in finance, accounting and contracting.
The Veterans Corporation has gone through a number of
mission and staffing changes since its inception. Its latest
version is to assist Guard and Reserves and transitioning
members of the Armed Forces and their families with the
establishment of their own businesses.
TVC has, in the past, stressed creating online education
programs to assist veterans with obtaining basic literacy
skills, hosted by other third-party organizations. Their
current plans are to create an online platform to match
veterans with entrepreneur education and career opportunities
and to provide grants to Small Business Development Centers
around the country and to other business development
organizations to specifically assist veterans.
In conclusion, the American Legion realizes the National
Business Development Corporation created through Public Law
106-50, was uniquely positioned to provide American veterans
with superior entrepreneur training and business resources that
show them how to start or to grow their businesses and, in
turn, to contribute to the economic well-being of the Nation.
The American Legion believes that TVC has not fulfilled the
mandates of Public Law 106-50 and is actively moving away from
those mandates of the public law by focusing their efforts and
funding on online entrepreneur programs that they believe would
maximize their available resources and reach more returning
veterans. Therefore, the American Legion strongly recommends
that the Small Business Administration Office of Veterans
Business Development be the lead agency to ensure that veterans
returning from Iraq and Afghanistan, particularly, are provided
with entrepreneur development assistance.
Comprehensive training should be handled by SBA and
augmented by TVC's online training.
The American Legion strongly supports the mandates of
Public Law 106-50 that were designed to assist all veterans
wishing to start, expand or protect their businesses. If there
is a true desire to assist veterans, especially those returning
from Iraq and Afghanistan, in developing small businesses, we
must work together to enforce the mandates of Public Law 106-
50.
Madam Chairman, this concludes my testimony. I appreciate
the opportunity to present the American Legion's views on these
important, timely topics.
[The prepared statement of Mr. Sharpe appears on p. 67.]
Ms. Herseth Sandlin. Thank you very much, Mr. Sharpe, for
your testimony and for being here today.
Mr. Weidman, you have 5 minutes. Although that was our 15-
minute bell, that will be just right for you to give us your
opening statement and then for us to return for questions that
we may have for all three of you.
STATEMENT OF RICHARD F. WEIDMAN
Mr. Weidman. Madam Chairwoman and Mr. Boozman,
distinguished Members of Congress, thank you very much for the
opportunity for Vietnam Veterans of America to present our
views here today on this extraordinarily important question.
And I say ``extraordinarily important question'' because
veterans getting into business with assistance from the Federal
Government, and particularly disabled vets, are much, much more
likely to hire other disabled veterans. If you want to do
something about veterans' employment, do something about
growing veteran-owned and service-disabled, veteran-owned
business. That is who will reach out to the young people coming
home from the wars today all torn up; give them the break and
recognize the ability instead of seeing the disability, give
those folks a break to really realize all they can contribute
to American society in civilian life.
In regard to the major entities that are supposed to be
assisting us in growing that pie, if you will, of veteran-owned
and service-disabled, veteran-owned business, the VA has done
far and away the best job. We believe that is for a variety of
reasons. The previous Secretary was very strongly committed to
helping veterans enter business and succeed at business. When
Secretary Nicholson came on board, on his second day on the
job, the executive directors of the ``big six,'' which includes
me from Vietnam Veterans of America, met and had breakfast with
the Secretary. The first thing I brought up to him was the need
to make that 3 percent and exceed that 3 percent and set an
example for the entire U.S. Government and for all departments
and agencies that it could, in fact, be done.
What happened is, while we had had great cooperation out of
CVE and had the establishment of the vendor information pages,
that were a tremendous tool that continues to prove to be more
and more valuable as the place where you can find folks, it was
the commitment from the Secretary and the establishment of
Executive Order 13360 which forced every agency to produce a
plan and to designate a senior designated official.
Now, in agencies like VA, where they designated the Deputy
Secretary, as a senior designated official, as the Chief
Operating Officer, you had someone you could go to who could
actually make something happen. In other agencies where they
designated the Director of the Office of Small and
Disadvantaged Business Utilization, they have no line authority
whatsoever. Therefore, we did not have anybody to work with at
a senior level.
Since that time, folks are asking about how do we get
accountability. Creating ombudsman offices at each of the
Federal agencies, we do not believe, is the right way to go.
Frankly, the way to go, in our view, is by continuing to bring
public light on the issue.
We ask for your assistance from this committee in the way
of a bipartisan letter from the chairwoman and the ranking
member to the head of SBA, asking for a legal opinion as to why
the 294s and 295s--294s are the plans filed by major
contractors as to what subcontracting they are going to do, and
they are bound to 3 percent of their subcontracts going to
service-disabled, veteran-owned businesses; the 295s are the
actual results of what they actually did at the end of the
contract.
The SBA continues to sandbag us on this. This is something
we have brought directly to the administrator, have told him we
are going to file a Freedom of Information Act (FOIA). If by
Memorial Day we do not have access to same, we will file a
FOIA. If that does not work, we are going to Federal court in
order to seek that information.
It is being sandbagged on the grounds that it is
proprietary information. It is not proprietary information. We
are talking about taxpayer dollars and the United States Code
and enforcing here.
So the issue of accountability is, frankly, that the task
forces fill that role. The Center for Veterans Enterprise was
not in a position to do that. The SBA, until we got our new
administrator--who, I might add, we have more confidence in
than anybody who we have had in 20 years in that role as
administrator of SBA; in terms of what appears to be the
evidence toward doing something useful for vets, SBA has been
irrelevant.
Frankly--I am not going to spend any time talking about The
Veterans Corporation because, frankly, they are irrelevant to
most of the things that we are interested in in terms of either
the delivery of direct services to veterans, in terms of
helping them, preparing them to succeed in business; and they
are totally irrelevant in terms of getting accountability from
the agencies in terms of contracting.
I see I have 30 seconds, Madam, and I just want to wrap up
by saying VA is doing a great job, and they can do a better
job, but that is because of commitment directly from the top.
The SBA, we believe, is doing a mediocre job, but heading
in the right direction and, with the new administrator, will do
the right thing.
The Veterans Corporation instead of giving them $25
million, we should divvy that up between the Office of Veterans
Business Development and the Center for Veterans Enterprise and
get on with the serious business of helping veterans succeed in
business, particularly when it comes to Federal procurement.
I want to thank you very much for the opportunity to offer
comments here today, and I look forward to answering any
questions anyone may have from this distinguished panel.
Thank you.
[The prepared statement of Mr. Weidman appears on p. 71.]
Ms. Herseth Sandlin. Thank you very much.
There is just one vote. We will head down for this one vote
and be back momentarily for questions to the panel.
Thank you.
[Recess.]
Ms. Herseth Sandlin. Thank you for waiting for us to make
that trip over to the Capitol and back. Let me just start out
with a question for all of you.
Can you tell me what you know of the DOD Mentor Protege
Program that Ms. Halfaker mentioned in her testimony and how
long that has been around and how well it has worked for
veterans who you have worked with in the past? Also, any
thoughts on Mr. Jimenez' testimony with regard to advocacy and
opportunity, in addition to training financial assistants, and
the relative weight of importance for new businesses /
established businesses for veterans and, specifically, service-
connected disabled veterans and their businesses?
Mr. Wynn. Thank you.
With regard to the DOD Mentor Protege Program, I do not
know all of the exact specifics about it, but I am familiar
with it somewhat.
It has been around for a while, and it seemingly has been a
very effective program. As a matter of fact, we have often
asked and inquired as to why don't they have these programs
within each of the agencies. They have them in some of the
others, but not all; and it seems to be a very effective way to
get a small entrepreneur business that is up and growing--to
really get them over to that next level by working with a more
established company.
With regard to advocacy, I think that is a very key and
fundamental piece in this whole picture here with service-
disabled and veteran businessowners and its 3 percent goal,
because so often we are hearing that within the agencies there
is disagreement about the interpretation of the law.
We have got veterans--I hear from veterans who have tried
to establish themselves within a particular agency only to be
told that even though they are capable and qualified,
seemingly, in that particular region, they are the only
service-disabled vet who could do that particular work, so they
are reluctant to set it aside for that particular service-
disabled vet's company with contradictions about whether to
sole-source, or the Rule of Two which--we have asked that they
eliminate that because of the confusion. So the advocacy role
is very important.
As I mentioned, too, we thought that there would be some
entity that would be nongovernmental to work with the veteran
business community, to serve as that advocate; and for the most
part, over the past few years, it has turned out to be the
Veterans Entrepreneurship Task Force, and the members of that
task force comprise various veteran service organization
representatives.
You also have veteran small businessowners, and you have
other interested persons and supporters who just come together
and provide support and advocacy.
Mr. Sharpe. I know of the protege program only through Mark
Gross. He has always spoken favorably of it, and through him, I
have met other entrepreneurs who would like to have that same
sort of experience. So it sounds like that would be a
worthwhile program.
It appears that the biggest problem that a lot of these
businessowners have, who want to do business with the
government, is in not having access to certain individuals
within the government who could probably help them or mentor
them; and I could see that as being something that you would
probably want to expand and build on.
As far as advocacy, you know, I thought that could be a
role of The Veterans Corporation since most Federal agencies
cannot lobby and do that themselves, that that would be a niche
kind of mark for them where--since they are here in Washington,
that that is something that they could follow up on as far as
working with the Federal agencies. They seem to know everyone
on the Hill anyway, and that would be a good--it would probably
help the veterans community if they could fill that role or to
have some organization fill that role, that niche role of
advocacy, because it is important.
Mr. Weidman. I think that the question of advocacy, if I am
not mistaken, Madam Chairwoman, had to do with advocacy before
the agencies--to try to get the agencies to do what they are
supposed to be doing.
In terms of advocacy on the Hill, it is our reading of the
law that The Veterans Corporation because it is virtually 100
percent federally funded, is precluded from being up here
lobbying for more Federal dollars.
There was a question about that from a Republican counsel
yesterday, and so we went to legislative counsel yesterday and
reviewed that section, and the section of the law that says
that The Veterans Corporation may seek funding from Federal,
State or local organizations is clear and is based on a
Committee report that what it meant is, you can seek grants
from those existing entities, not that you can come up here
and, unfettered, using Federal dollars 100 percent, lobby the
Congress for new laws and for additional dollars, which is
clearly precluded under the United States Code.
Now, in regard to advocacy before the agencies, the good
Lord helps those who get their act together and start to do it
for themselves. We have invited the gentleman from the previous
panel to join us before on the task force because that is what
we do. We meet regularly and have regular contact with OFPP.
Now we have somebody who is actually responsive at the SBA,
at the top of the SBA, both the chief of staff and the
administrator we are in contact with there. We reach out to all
of the major agencies in terms of contacting about how can we
work with them to help them do what they are supposed to be
doing in the first place, and all of those things; and we would
certainly invite all three of the previous panel members to
join us.
We meet monthly with the task force, and it has work that
is ongoing daily with most of the major veterans and military
service organizations and many independent businessowners; and
we would urge them to join us. We are meeting again tomorrow
with DOD, with the Deputy Under Secretary of Defense, and I
have already supplied this to your staff about the seven
talking points that we are going to be going over there. We met
last Friday, and we are meeting again tomorrow to see some
things that they can do at DOD.
We are very grateful for the pressure applied by Senator
Kerry and Senator Snowe at a hearing from January 31st. The
mere fact of this hearing today will apply pressure to many
other agencies; and it is up to us to work closely with those
of you on the Hill who are friends and advocates in order to
either change legislation or to get people to do what they were
supposed to be doing in the first place in terms of publicity
and in letters.
On June 14th, the task force is, with the Center for
Veterans Enterprise, cosponsoring a Veterans Accountability
Conference, to which I would like to personally invite you; and
you will get a letter, in addition to that, plus all other new
members of this distinguished panel. And on that day, I am
going to be issuing a report card to the Nation on how well
each of the agencies is doing both in terms of actual numbers
of contracting out, but also in regard to how that squares up
with the plan that the agency had to file under Executive Order
13360.
Last but not least, under the whole question of advocacy,
it has become clear to us--and I want to publicly express again
how grateful I am to you and to Mr. Boozman for the bipartisan
leadership of this Committee in establishing the section of
Public Law 109-461 which gives additional tools to the VA. We
are using that as a model in approaching other Members of
Congress on both sides of the Hill, asking them in their
Committees to make that apply to the Interior Department, to
make that apply to DOD. We are actively discussing that even
with the Deputy Under Secretary of DOD.
This is the kind of tool that DOD needs to have because
that is who the agencies listen to. They do not listen to the
SBA, and they really do not even listen to OFPP. Who they
listen to are their authorizing and appropriating Committees.
That is who gets their attention and keeps it; and therefore, a
whole series of laws that gives those kinds of tools and forces
them to report back every year to their authorizing and
appropriating Committees is the way we believe we need to go.
So last but not least, we are certainly not looking to The
Veterans Corporation and we are not looking to someone else to
do what we already can do together, meaning the veterans
service organizations, military service organizations, the task
forces, and those individual veterans businessowners who have a
rubric already to come together.
I might also add that we have increasingly reached out to
the U.S. Chamber of Commerce, and--that is where the real big
bucks are anyway and not with doing business with the Feds--and
they are using VIP as the model. And at the Small Business
Summit at the end of this month, they are going to be using the
brochure that was prepared by Scott Denniston and his staff
with private employers, to get them to go use the vendor
information pages at the Center for Veterans Enterprise for
Fortune 500 companies to start reaching out and doing
contracting with veteran-owned and service-disabled, veteran-
owned businesses.
Those the kinds of advocacy efforts, frankly, that you
cannot rely on someone who is in a bureaucratic position, as
ombudsman, to do. Those are the kinds of things where we have
to have the leadership coming from the community to get things
done.
I, once again, want to thank you for your leadership and
for that of your distinguished colleague on the other side of
the aisle for keeping this process moving.
Ms. Herseth Sandlin. Thank you all for your responses.
Mr. Boozman, do you have questions for the panel?
Mr. Boozman. Just a few.
I think that really is a good idea. Again, in working with
the chairwoman, we might provide the model law. Many of us--in
fact, all of us--are on other committees. I am on the
Transportation Committee. To go to the Foreign Affairs, to go
to the State Department and to go to the others and then try
and do through our Committees, what we have done here; I think
that is an excellent idea.
I would like, with your permission, Madam Chairwoman--Mr.
Weidman has referred several times to different statutes or
whatever he feels like is not being done. I would like to enter
into the record the White House Service-Disabled Veterans
executive order. I think this was around October 21st of 2004;
and it is excellent.
In looking through this--and this is the first time I have
seen it in a while--we really are not doing a very good job of
meeting what the President asked us to do, and so I think this
just kind of piggybacks on the statement that you had.
Ms. Herseth Sandlin. Without objection, so entered.
[Executive Order 13360--Providing Opportunities for
Service-Disabled Veteran Businesses To Increase Their Federal
Contracting and Subcontracting, dated October 20, 2004, appears
on p. 95.]
Mr. Boozman. Thank you.
The other panel felt like senior procurement officials were
certainly key, and I think we would all agree with that. Do you
all have any suggestions on how you feel like we could
influence the senior procurement officials to do a better job
of advocacy and things? How do you do that, from your
perspective?
Mr. Wynn. Thank you, sir, for allowing me to respond to
that question.
I think, quite frankly, without a doubt, Congress has a
great deal of influence that could be leveraged on the agencies
to actually come forward and do the things that have been
required of them under the law.
I am glad you mentioned, too, about the Executive Order
13360. That order, to me, in my opinion, laid out a very clear
directive of how we could possibly increase contracting
opportunities for service-disabled veterans, and veterans, as
well. The problem with it, though, is that very few of the
agencies have actually been following that executive order
where it calls for them to actually develop a specific,
strategic plan; to name a particular senior-level official who
will oversee that plan for that particular agency; and it also
calls for SBA to be involved with the monitoring of that plan,
which has been really difficult in that regard for that to
happen.
We have had some discussions here recently with the SBA
about beginning to provide some oversight of these strategic
plans and calling for the agencies to present them because,
each year, each agency was supposed to, at the end of the year,
submit a report indicating what progress they had made within
their agency and, in addition to the report, revise the plan
based on how well they had done and, actually, publicly display
a new plan so that we, all of us, could follow along and see
what they intended to do for each year.
To my knowledge, these plans have only been published one
time since that executive order came out, and we still
encourage the agencies to do it because it actually lays out a
road map as to how you are going to increase these
opportunities, and if it is not working, we have got some
checks and balances, something to look at, a guide, to say,
``Okay, that is not working. Let us try this.''
So, yes. I think Congress, if they would continue, as you
are holding these hearings here today, to discuss the issues
and give us an opportunity, too, to broaden this discussion
either by additional hearings or a series of round tables or
independent study groups to look at the issues so that we could
actually come forward with some real recommendations, that
would improve the process and increase the number of contracts
to service-disabled veterans and veterans.
Thank you.
Mr. Boozman. Thank you, Mr. Wynn.
Mr. Weidman. Just, if I may, tack onto that, at the VA,
things really started to change, and Scott Denniston started to
get the support that he needed when we realized we were not
getting anywhere and went to the deputy secretary and said,
``Put it in their performance evaluations, by God; then they
will care about it because they will not get their bloody bonus
if they do not make the 3 percent.''
With the howls and the screams from those 21 visiting
directors, I am surprised you could not have heard them back in
Arkansas when you were home for the work period, because they
did not want to do it. They all said they were trying, and all
of a sudden, as soon as it was in their performance
evaluations, that is how the VA made the 3 percent.
So it not only needs to be in the managers' evaluations; it
needs to be in the contract officers' evaluations, whether or
not they are making the effort in the 3 percent of the
contracts that they write; and the subcontracts of the
contracts they write really are for service-disabled, veteran-
owned businesses. It is amazing how reasonable people can be
once you have their full attention, Mr. Boozman.
Mr. Boozman. Thank you.
Ms. Herseth Sandlin. I have some additional things I want
to explore, but I also know, with the third panel waiting, that
we want to get to them. I think that your testimony here has
provided us some additional ideas. I am pleased that Ranking
Member Boozman is inclined to pursue working together, as we
have in the past and have continued to do so, as we tried to do
under Mr. Buyer's leadership, as Chairman of the full Committee
last Congress. We need to look at information technology and
data security and the changes that need to be made in response
to the problem that we had last year. We can share, as you
mentioned, Mr. Weidman, the tools that we authorized with our
chairmen and ranking members of Full Committees, of the others
on which we serve and of others throughout the Congress, too.
Perhaps making reference to the executive order and getting the
administration's support in working with all of the Committees
to try to encourage the same kind of commitment among the
Cabinet secretaries of the other agencies and providing the
tools and the lines of authority to deputy directors.
This is another example of how important your input is to
us, and we will look forward to following up with you on some
other areas.
One that I would like to follow up on with you is the issue
mentioned by Mr. Wynn, and I saw your head was nodding, Mr.
Weidman. It is this loophole in the sole-sourcing issue, in
terms of the contractor requirements and different
interpretations of if, indeed, there is one identified business
that is a service-connected disabled, veteran-owned business.
I do not want to follow up now, because I think it is an
area that would be better served by a more informal discussion
and getting a more complete explanation on from what the two of
you know on how we might be able to address that in the fuller
context of some of these other areas. Whether it is the larger
companies using the smaller companies as fronts, and a whole
host of things that we may want to work on with the Small
Business Committee.
We thank you for your testimony and for your insights
today.
I now would like to invite our third panel up that we have
participating with us, and I want to thank them for their
patience as they make their way forward.
We have Mr. Walter Blackwell, President and Chief Executive
Officer for The Veterans Corporation; Mr. William Elmore,
Associate Administrator for Veterans Business Development of
the U.S. Small Business Administration; Mr. Scott Denniston,
Director of Small and Disadvantaged Business Utilization for
the U.S. Department of Veterans Affairs; and Mr. Louis Celli,
Chairman of the Advisory Committee on Veterans Business Affairs
for the U.S. Small Business Administration.
STATEMENTS OF WALTER G. BLACKWELL, PRESIDENT / CHIEF EXECUTIVE
OFFICER, NATIONAL VETERANS BUSINESS DEVELOPMENT CORPORATION,
THE VETERANS CORPORATION; WILLIAM D. ELMORE, ASSOCIATE
ADMINISTRATOR, VETERANS BUSINESS DEVELOPMENT, U.S. SMALL
BUSINESS ADMINISTRATION; SCOTT F. DENNISTON, DIRECTOR, OFFICE
OF SMALL AND DISADVANTAGED BUSINESS UTILIZATION, CENTER FOR
VETERANS ENTERPRISE, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND
LOUIS J. CELLI, JR., CHAIRMAN, ADVISORY COMMITTEE FOR VETERANS
BUSINESS AFFAIRS, U.S. SMALL BUSINESS ADMINISTRATION, AND CHIEF
EXECUTIVE OFFICER, NORTHEAST VETERANS BUSINESS RESOURCE CENTER
Ms. Herseth Sandlin. Thank you all for being here.
Mr. Blackwell, you are recognized for 5 minutes. Again,
your written statement, will be made part of the record. So if
you want to modify that or perhaps respond to anything that was
mentioned in the first two panels, you are recognized for 5
minutes.
STATEMENT OF WALTER G. BLACKWELL
Mr. Blackwell. Thank you, Madam Chairwoman, Ranking Member
Boozman, distinguished Members of the Subcommittee and, of
course, Congresswoman Davis.
Good afternoon. I thank you for the opportunity to testify
before you today. In addition to my written testimony, I would
like to add TVC's fiscal year 2006 annual report to the record,
if I may, that was made available to both Congress and the
President.
[The TVC 2006 Annual Report has been retained in the
Committee files.]
My name is Walter G. Blackwell. I am the President and CEO
of The Veterans Corporation and a Navy veteran. It has been a
long afternoon, and we have heard from several sectors
supporting veteran entrepreneurship. Each of us is committed,
well-intentioned, although we do not always agree, as you have
heard.
The one topic on which we all find common ground, though,
is that Congress must continue to support veteran
entrepreneurship and self-employment. Veteran entrepreneurs
need assistance in quickly finding and accessing business
information and mentorship--programs like Mentored Access to
Capital, Mentored Access to Bonding with no Caps, Start-Up and
Growth Business Paths--resources delivered through TVC staff,
as well as our public-private partnerships, providing the
business knowledge and support that is essential to standing up
and running successful businesses.
In my written statement, you will find details on each of
these programs that TVC is currently pursuing. Two new, key
programs that I would like to call your attention to are Boots
to Business for Transitioning Veterans, and Deploy-Proofing
your Business for our Nation's Guard and Reserve. However, the
delivery of these programs alone, without direct mentorship and
casework follow-up, is an empty promise for our veteran
entrepreneurs. That is why TVC staff and our partners are
actively engaged in the mentorship of veteran entrepreneurs no
matter what program they are currently going through.
Within the veteran entrepreneurship community that now
spans 6-plus decades, needs differ greatly based on the type of
business they want to start, based on geography that they are
located in, and on their education and business experience.
Therefore, there is no one cookie-cutter solution, no one
program, no one opportunity, no one government agency or
organization, no one way to impact education that will be able
to answer the wide range of questions that veteran
entrepreneurs ask daily; and certainly no one way to distribute
past and current hard and soft business tools that will be
needed by each of them.
For these reasons, The Veterans Corporation delivers,
through the abilities of its funding, a diverse range of
programming and multiple delivery methodologies of business
education from face-to-face learning to online learning, all
leveraging technology, delivery and tracking.
The important work of our Veterans Business Resource Center
hubs, that the TVC finances through noncompetitive grants in
Boston, Massachusetts, St. Louis, Missouri, and Flint,
Michigan, is a valued link of TVC's outreach into the veteran
community. However, each of these centers has a limited reach
based on the urban area they serve. For veterans outside their
reach, TVC staff, working once again through public-private
partnerships, provides support services to disabled veterans
unable to travel to that hub, or frankly, to rural veteran
populations anywhere.
Public-private partnerships are possible through TVC's
status as a 501(c)(3) entity. This important difference permits
TVC to form these partnerships for enhanced veteran programming
where government agencies are limited or prohibited by law from
increasing the critical elements of business support,
especially to capital and bonding.
So how is TVC making a difference? TVC has a handout, which
we have provided, that samples some of the veterans we are
currently working with--one with a microloan need, another
currently in Iraq who found us via TVC's website with a major
capital requirement, a third with a bonding need, and finally a
veteran who wishes to do business with the Federal Government.
In addition, I am submitting for the record, our letters of
support for the ongoing efforts of TVC from the Disabled
American Veterans and the Iraq and Afghanistan Veterans of
America.
Madam Chairwoman, in my prior 25-year career in corporate
America and now having spent the last 14 years of my
association leadership career working with entrepreneurs on
five continents and in 65 countries, I can say with certainty
there is no one single answer, no one single solution to the
issue before this Committee today.
Veteran entrepreneurship and self-employment demand each of
today's panel members to come together and consistently and
constantly explore the best practices for and develop a deep
mentorship relationship to help the survivability of veteran
entrepreneurial efforts.
TVC has invested a great deal of time in intellectual
capital, monitoring and working with leaders from the education
and business communities. The TVC, limited by both funding and
reach, makes every attempt to provide both broad-brush
solutions and targeted programming and services a reality for
veterans.
In the true spirit of entrepreneurship, TVC has embraced
existing services both inside and outside the government,
expanding its reach through technology, and stands ready to
provide solutions to meet the increasing demands and needs of
veteran entrepreneurs so that they are not left alone.
Madam Chairwoman, thank you for this opportunity, and this
concludes my testimony.
Ms. Herseth Sandlin. Thank you, Mr. Blackwell.
[The prepared statement of Mr. Blackwell, and attached
referenced letters of support, appears on p. 74.]
Ms. Herseth Sandlin. Mr. Elmore, you are recognized for 5
minutes.
STATEMENT OF WILLIAM D. ELMORE
Mr. Elmore. Chairwoman Sandlin, Ranking Member Boozman and
other distinguished Members of the Subcommittee, thank you for
the opportunity to appear before you today to share information
on the state of veteran entrepreneurship and self-employment
and the efforts of the U.S. Small Business Administration to
assist and support veterans, service-disabled veterans and
Reserve component members who are self-employed or small
businessowners.
I am William Elmore, the Associate Administrator for
Veterans Business Development.
As expressed in the January 24, 2007, memorandum for heads
of departments and agencies, jointly issued by SBA
Administrator Preston and the Office of Federal Procurement
Policy Administrator Bennett, the administration is broadly
committed to enhancing all of our entrepreneurial programs and
services for veterans and reservists, especially those
returning from duty in the global war on terror and for those
service members injured or disabled in service to America.
As the Associate Administrator for Veterans Business
Development, I manage our National program for veterans and
support administration programs and policies for veterans and
reservists. I coordinate SBA activities with other Federal,
State and local government programs and with not-for-profit and
private partners. Each year, my office delivers direct
assistance to over 25,000 veterans and reservists through five
Veterans Business Outreach Centers and through special
competitive funding for our district office Veteran Business
Outreach Initiatives coordinated by R-68 Veterans Business
Development Officers.
SBA's Veterans Business Development Office acts as a
liaison and as a technical expert to our Federal partners and
agencies with procurement authority, and I do act as an
ombudsman for full consideration of veterans in every
administration program. Each year, SBA provides reportable
direct and indirect assistance to more than 100,000 veterans
and reservists who participate in every SBA program.
While improved services are being delivered, Administrator
Preston and Deputy Administrator Carranza have tasked each
office within SBA with reviewing their programs and how they
support veterans' small business success. We are identifying
additional steps that every program can take to better deliver
SBA assistance to veterans, reservists, discharging service
members, and family members.
Recent examples of improved services to this important
population is inclusion as a target market in our community
express loan program that offers expedited loan processing with
mandatory business planning and technical assistance. We have
recently improved our surety bond guarantee program for
service-disabled veterans and veterans, and we are exploring
new ways to further target the veteran, Reserve and Guard
community through our lending programs. Thus far, the results
have been good. The numbers of new loans being made to veterans
has increased significantly. The number of new loans to
veterans has grown from 4,800 in fiscal year 2000 to
approximately 8,000 in fiscal year 2006.
Public Law 106-50 established a 3 percent Federal
procurement goal for prime contracts for small businesses owned
and controlled by service-disabled veterans and established a
``best efforts'' clause for veterans in Federal procurement at
the subcontracting level. While the government has yet to
achieve the required 3 percent goal for Federal procurement, we
are making progress toward it. In 2004, the President issued
Executive Order 13360, and preliminary data shows that both SBA
and the Department of Veterans Affairs each exceeded their
respective 3 percent goals for fiscal year 2006. Leading by
example, this represents a significant improvement for both
agencies over achievements in fiscal year 2005.
Each year, our Office of Entrepreneurial Development and
our resource partners provide small business counseling and
training for approximately 1.5 million aspiring start-up and
growing small businessowners. Annually, close to 90,000 of
these customers are veterans, service-disabled veterans,
Reserve component members, and active duty personnel. Our SBDC
national office provides program design, core operational
funding and oversight to almost 1,100 Small Business
Development Centers.
In addition, we deliver assistance through the expertise of
almost 400 SCORE chapters, with approximately 11,000
experienced SCORE business counselors, and through 100 women's
business centers. We also provide a robust range of online
business counseling and training opportunities, supporting
everything from start-up and early-stage decision-making to
significant expansion and growth assistance.
Let me turn my attention to our efforts on behalf of small
businessowners who are members of Reserve components of the
U.S. military and who have been or may be activated for the
global war on terror. In August 2001, we began offering our
Military Reservist Economic Injury Disaster Loan as one tool
that can be of great assistance to an activated reservist. We
have implemented a comprehensive outreach program that includes
veterans and reservists, and we have strengthened our business
counseling and training programs to inform, develop and deliver
pre- and post-mobilization business planning that can be
critical to the economic success and survivability of reservist
small businessowners.
After the September 11th, 2001 attacks on America, we
established an SBA Committee to coordinate outreach and service
delivery to reservists. We created and had distributed more
than 400,000 SBA Reserve and Guard fact sheets, and we
established special Web pages for reservist small
businessowners in 2002, with over 700,000 visits since then.
Now we know Web is not enough as well.
Two years ago, we requested and secured the authority from
Congress to include reservists in our definition of ``veteran''
for purposes of our comprehensive outreach effort, and we
included ``veteran reservist'' in our community express loan
program to provide additional access to capital beyond our
Military Reservists Economic Injury Disaster Loan program.
Again I thank you for this opportunity to testify before
you today. I am proud of the progress we have made and of our
knowledge and assistance for aspiring and existing veteran
entrepreneurs, and I look forward to continuing to enhance
these efforts.
This concludes my testimony and I welcome your questions.
Thank you.
[The prepared statement of Mr. Elmore appears on p. 81.]
Ms. Herseth Sandlin. Thank you Mr. Elmore. I welcome Mr.
Denniston. You have 5 minutes.
STATEMENT OF SCOTT F. DENNISTON
Mr. Denniston. Thank you.
Madam Chairman, Mr. Boozman, Mrs. Davis, thank you for
convening the hearing today. I am honored to represent
Secretary Nicholson, Deputy Secretary Mansfield, and the
dedicated employees throughout the Department of Veterans
Affairs who serve our veterans daily.
I have good news to report. The veterans business program
is working well at VA. Last fiscal year our procurement budget
was $10.3 billion. Of this, we spent approximately $651 million
or 6.35 percent with veteran-owned small businesses. Of that
$346 million, or 3.38 percent of the total, was with service-
disabled veteran-owned small businesses.
We attribute VA success to several factors. Our leadership
demands commitment to veterans in business. Program executives
personally report their accomplishments at our quarterly senior
managers meeting. VA applied the strategies in our Executive
order plan and they have worked. Veterans doing business
throughout our Department have proven themselves to be solid
performers. The VA Office of Small Business and the Center for
Veterans Enterprise have been effective catalysts in working
partnerships to educate and assist both buyers and sellers, and
the Center for Veterans Enterprise is a very effective resource
for both veterans and the contracting activities.
As a result of Public Law 109-461, which I would like to
thank you for your leadership on, the VA is now the first
agency to place service-disabled veterans and veterans at the
top of our priority source list. In addition, this law provides
VA with direct sourcing authority--a tool unique among Federal
agencies. With this new program, VA expects a marked increase
in expenditures for service-disabled vets and veterans in
fiscal year 2009.
As you know, VA operates the Center for Veterans
Enterprise, which has 16 employees, 12 of whom were veterans.
CVE staffs a national call center to assist veterans interested
in businessownership or expansion; talks to veterans, and their
families and business partners daily. VA CVE also hosts the
VetBiz.gov Web portal and manages the VetBiz.gov information
pages, a database containing information about products and
services offered by veterans and service-disabled vets.
Veterans in this database may elect to receive daily
extracts from Fed Business Ops and extracts from VA's Forecast
of Contracting Opportunities. We also use the database to
conduct market research and to blast early alerts about
upcoming requirements or conferences.
We partner with other organizations. Our first partnership
was with the Association of Procurement Technical Assistance
Centers. The PTACs educate owners new to the Federal
marketplace. We refer many veterans to PTACs to help owners
learn how to be successful Federal contractors.
Another steadfast partner is the General Services
Administration. We have cosponsored regional conferences with
GSA and assisted in the Veterans Technology Service
governmentwide Acquisition Contract called GWAC. We look
forward to using that within VA in coming years.
At all of our outreach programs we distribute a tool kit
for veteran-owned small businesses which is jointly developed
and co-branded by GSA and VA. It contains legislation and
policy documents, information on how to market to Federal
agencies, a list of Federal veteran and business advocates and
templates to assist businessowners. This tool has proven to be
so successful it is now in its fourth edition.
We are continuing our joint outreach efforts with the
military services, conducting road shows with the Air Force,
Army Corps of Engineers, to reach military program managers.
The Corps routinely dispatches advanced procurement
announcements of forthcoming opportunities to owners in the
VetBiz information database. The Corps of Engineers has awarded
several Indefinite Delivery Indefinite Quantity contracts using
service-disabled vets set-aside authority. As a result you will
see many of those offices honored at our annual Champion of
Veterans Enterprise Award program.
We also have a very effective partnership with the Army
Small Business Office, through comprehensive support of the
military community, defense contractors, volunteers from a
range of Federal agencies and the businessowners community. We
have jointly organized the National Veteran Business Conference
for the past 3 years. This year's program will be June 25
through 28 in Las Vegas. Last year more than 1,200 participants
joined together to focus on how to improve opportunities for
veterans, especially service-disabled vets, in prime and
subcontracting. In the commercial marketplace, more than 300
franchise owners have joined the VetFran program which VA and
the International Franchise Association refreshed in 2002.
Currently, more than 700 veterans have opened franchises
under this program. Through VetFran, veterans are eligible for
reduced franchise fees and other support.
With that I will conclude my remarks and submit my written
testimony for the record.
[The prepared statement of Mr. Denniston appears on p. 84.]
Ms. Herseth Sandlin. Thank you very much, Mr. Denniston.
Mr. Celli, you are recognized for 5 minutes.
STATEMENT OF LOUIS J. CELLI, JR.
Mr. Celli. Thank you. Well, good afternoon, Chairwoman
Herseth Sandlin, Ranking Member Boozman and Congresswoman
Davis, Members of this Subcommittee. Thank you for the
invitation to come before you and discuss veterans
entrepreneurship.
It has been 7 years since the unanimous passage of Public
Law 106-50 and this Subcommittee now asks basically, how are we
doing? My name is Louis Celli and I am a 22-year veteran of the
United States Army, a service-disabled veteran. I started two
businesses and I am the chairman of the SBA's Veterans Small
Business Advisory Committee.
You have assembled before you today some of the most
renowned names in the veterans community. You have heard their
testimony and you have listened to the needs of your
constituents. So now what do we do? We know that the program
hasn't quite hit the mark, not yet. We know that the Federal
agencies and federally funded programs charged with carrying
forth this plan to promote and defend veterans entrepreneurship
all believe that they are hitting the mark. We know that
veterans aren't so sure.
But what does this mean and what can we do about it? It
means that when you set your own goals and standards by which
success is measured, success is easily achieved.
I retired in 2002 as an Army master sergeant. When I was on
Active Duty, it was my job to take care of soldiers. When I was
working with Army Recruiting Command, my job was to reassure
parents of the new soldiers coming into the Army that their
sons and daughters were going to be protected and taken care
of. I was then, and I am still today, proud of our Armed Forces
and proud to have worn our Nation's uniform.
One of the hardest things for me now is to be working with
the returning veterans as they process through Walter Reed. I
feel a deep sense of guilt. I feel that I have let them down
because I am not personally out there today in a Humvee
protecting them. I have to keep reminding myself that it is not
my job anymore. I have tried to go back but I can't. I am 40
percent disabled. I am no longer qualified to serve in the
Army. This is very hard. The men and women are hurt and in some
cases they are hurt bad.
Seven years ago we passed a law that was meant to address
the needs of American servicemen and women who wanted to
compete as businessowners in the American economy they fought
so hard to protect. Seven years ago we were riding high on a
nation at peace and at full strength militarily. Seven years
ago, we knew that we hadn't done enough to assist veterans--
particularly service-disabled veterans--in serving a greater
role in the economy of the United States by forming and
expanding small business enterprises directly from Public Law
106-50.
Seven years later we are still not there. Why? No
coordination. We created the right tool, but put in place no
measures for success, oversight, or accountability. You charged
the VA, SBA, TVC with building programs, told all the Federal
agencies to support this effort and then closed the book. No
one was put in charge. Since no one was in charge, no standards
were set.
Who could say whether the agencies or corporations were
complying or not? Based on the fact that we are here today, and
this is the third congressional hearing in almost as many
months regarding the same issue, it is apparent that your
constituents are not satisfied, veterans and nonveteran alike.
It has become such an important issue, that congressional
leaders are working together in uncommon fashion, as
represented here today by the Honorable Congresswoman from
California, Congresswoman Davis, who has been asked to attend
as a guest of this Subcommittee.
It may be time that we take a good look at restructuring
this program and assembling all of these independent moving
parts into a cohesively high-functioning machine. We would save
money, effort and time, and finally put an end to the turf wars
which have plagued this program from the beginning.
Congress needs to establish an office to organize and
coordinate this program, Veterans Business Program Management
Office, and it should be an office with Federal authority. This
office should be responsible for monitoring, assisting,
organizing and coordinating oversight of the Veterans
Entrepreneurship Advocacy, Veterans Entrepreneurship Training,
Veterans Professional Skills Certification, Veterans Federal
Procurement, also assisting with Veterans Procurement at the
State level, promotion of public and private partnerships with
regard to Veterans Entrepreneurship, Small Business and
Employment, Entrepreneurial Vocational Rehabilitation Case
Management, and Comprehensive Work Therapy and Training
Directorate.
This office should report directly to the President of the
United States and to Congress and either this Committee or the
Small Business Committee, or a new Committee comprised of
representatives of each. I have been approached by companies,
small businesses and entrepreneurs, both veteran-owned and
nonveteran-owned, who have offered to build complete companies
with the sole intention of employing only service-disabled
veterans. We need a program which assists them as well.
Members of Congress, I can't protect these veterans
anymore, but you can. Help us. Help us build a program that
will work and that will be around long after we are gone,
benefiting American warriors, wounded and whole, the men and
women who have suffered so much and to whom we owe so much in
return. We are not all Democrats, Republicans, or veterans, but
we are all Americans. And each and every one of us in this room
have benefited from the sacrifices of time, sweat, and blood
that our American service members have made and continue to
make for us each day.
Thank you for holding this hearing. Thank you for your
continued interest in veterans entrepreneurship.
[The prepared statement of Mr. Celli appears on p. 87.]
Ms. Herseth Sandlin. Thank you very much, Mr. Celli, and
thank you to all of you. I am trying to figure out the best way
to begin the questioning here, so let me begin with a preface,
one I hope we all share. I have met some of the individuals
that each of your agencies or that The Veterans Corporation
works with and I don't think that there is any disagreement in
regards to the various services you have provided, and some
individuals that you have worked with, that there have been
success stories, and that there are people, veterans and their
families, who are enormously grateful to the people that work
with you in your different organizations.
But I think that Mr. Celli makes a very good point about
the issue of oversight, coordination and accountability, and
that has seemingly been the overarching theme of much of the
testimony we have received today. We are focused on how to best
deliver services and administer the benefits that veterans have
earned in a way where someone is in charge of at least
overseeing how this is all working, when Congress passes new
authorities, establishes new entities, makes changes along the
way but, again, wanting to do it in the most efficient way
possible.
When Mr. Sharpe from the previous panel mentioned The
Veterans Corporation in particular and observed, I think as he
put it, there have been numerous mission adaptations or changes
over time, that I think we need to explore a little bit.
I do want to pose my first question to you, Mr. Blackwell,
with regard to some of the programs that you have consistently
offered, some of the new programs that you have described. Let
me ask you, in particular, about the bonding programs and
access to capital. If The Veterans Corporation didn't offer
those programs, where would a veteran go? Mr. Elmore, you can
jump in here too. Is there any coordination of activities
between The Veterans Corporation and the Small Business
Administration as it relates to bonding? I believe, Mr. Elmore,
there is the surety bond guaranty program through SBA. If you
can begin perhaps, Mr. Blackwell.
Mr. Blackwell. Thank you Madam Chairwoman. I would be happy
to enumerate on your first part of that, which is why so many
changes, why so many tacks, why so many approaches. The issue
is we are, as we said earlier, a six-plus generation community.
We are bifurcated on self-interest. We are bifurcated on the
main mission accomplishments of those organizations. And it
makes it very, very difficult to come together on any one
particular thing.
TVC is tasked to start and grow businesses. And one of the
things this particular panel shares in common is you have
before you two ex officio members of our board of directors,
and you have Mr. Celli who is a funded arm of TVC's local
provision through Boston, Massachusetts. I can tell you that we
work very closely together as a board to look at opportunities
that exist within the current agencies. And certainly the
seven(a) loan program and the 524 program that SBA offers are
addressed in addition to--by the National Economic Opportunity
Fund (NEOF), and in fact Jim mentioned the president of that
organization is here today. And we look specifically at what is
the best issue for that veteran and their funding issues.
In addition to SBA's express program we have an agreement
with ACCION nationally for mini-micro loans from $500 to
literally $25,000, that are nice loans that are available. So
we really see the work we do with National Economic Opportunity
Forum and Access to Capital, a combined program with both
Bill's program and the seven(a) program, and then when veterans
aren't able to use those programs, we can go and work with them
either in the mini-micro loan program or with another lending
agent, usually within their community.
Why it is important to express the mentorship part of this
is that many veterans applying for capital go ill-prepared.
Either their business plan isn't ready, they haven't thought
through transitions. And our approach is that we mentor those
early steps through the NEOF program and TVC to prepare them to
best have their capital plan in place.
In terms of access to bonding, SBA's bonding program is
capped at $2 million. One of the other duties that I serve, as
vice chair of GSA's Small Business Advisory Council, we talk
about the issue of bonding. We talk about the programs that are
currently available through SBA, which is why in concert with
our other ex officio Member, DOD, we established a program,
Outside Partnership with Surety and Fidelity Association of
America, now almost a year ago. And that program allows us to
have a 50 State coverage with no caps. That means that a
company with either a single or aggregate bond level of $18
million doesn't have to worry about losing that current bonding
level to go tackle new projects or, in effect, Mentor Protege,
a new veteran company, which is often the case, to use and
leverage their current bonding level to start a new company,
receive bonding, and work at the State and Federal levels.
I would just say in general the reason we have seen so many
different programs come across is that we have learned a great
deal. We have learned that one size doesn't fit all. Face-to-
face works in certain groups. Face-to-face doesn't work with
our current returning Iraq and Afghanistan members. Bill
Ferguson, also here today with Iraq and Afghanistan's Veteran
Association, and his team and I have talked at great length
about how we best address these young men and women.
We had a wonderful phone call from Iraq just a week and a
half ago from a young first lieutenant who is literally opening
a restaurant in New Orleans, Louisiana, and needed extensive
funding. We were able to work with him very quickly to make
that happen. His restaurant opens literally in 30 days, before
he even returns back from assignment.
So I will tell you that we must continue face-to-face
relationships. We have entered into a Memorandum of
Understanding with the ASBDC, Association of Small Business
Development Centers. Mr. Don Wilson is also here today. I think
that is an incredible leveraging tool as we work with not
three, not eight, not 12, but literally 1,100-plus
organizations to make that possible to reach more veterans and
drive more veterans into existing facilities.
So that is my short version of how we think we are doing
it. I will just tell you we are very, very excited about this
new Boots2Business program and Deploy-Proof, because their all-
electronic tools that are all SCORE-compliant, can be used in
the field in Iraq, in South Dakota, in California, in
Washington, D.C., for important veteran entrepreneur business
to be transacted.
Mr. Elmore. Let me try to help address where I think Walt
was going, and we will talk about capital, at least at this
point. If you look at SBA programs, we have what you can argue
is sort of a continuum of access to capital, starting at the
smaller end with our microloan program, which has technical
assistance associated with it, average loans about $11,000. It
goes up to $35,000.
Then you get into our seven(a) range. And then you get into
our 504, which tends to be more of a community development
corporation engagement with structural kinds of things, buying
or building buildings, securing equipment, those kinds of
things; and then, ultimately, the venture capital world, which
has been supported to a great degree or started through SBA's
Small Business Investment Corporation program historically.
So we provide access to this full range of capital, but at
the same time we are nowhere near the majority lender for small
businesses in America nor should we be.
If you think of this community and you think of what we now
know are the approximately four million existing veteran
businessmen and women in America, the approximately three
million aspiring, Walt is right; there is no one answer. Every
business is different. Every existing or prospective
businessowner is different. And every idea that they want to
pursue is their own. And if you don't have this full range,
public and private, the majority of our lending, other than our
disaster loans, are through thousands of private bankers.
So as an example, as we design initiatives--and we are
working right now on some more lending initiatives specifically
for veterans, reservists, discharging service members and
others, we have to not only design to meet our constituency, we
have to design so that our lending partners understand this as
a valuable, usable productive tool for them as well. And
ultimately our role is not really to enable public success--
because in my view, entrepreneurial success in America
predominantly lies in America's private sector, not in the
public sector. So while procurement is an incredibly important
arena and a huge market, it is one part of the American market.
And our engagement is with the American market. Federal
procurement, as an important part of that, is a third of our
agency, but that is not where we focus all of our activity and
effort. It really is out into this private side. So I hope that
helps answer the question, ma'am.
Ms. Herseth Sandlin. It does. It may lead to others from
other members of the Subcommittee or some follow-up that I may
want to pursue. I am going to come back, just to put you on
notice Mr. Celli, I would like to get your thoughts and
responses to both what Mr. Elmore and Mr. Blackwell had to say.
I just wanted to put you on notice, because I want to recognize
the Ranking Member for questions he may have, and Ms. Davis and
I will come back to you after they are finished with their
questioning.
Mr. Boozman?
Mr. Boozman. Thank you, Madam Chairwoman. Mr. Blackwell,
you mentioned that, you went through a variety of different
ways you were trying to meet the needs of veterans. We have
heard a little bit of criticism regarding the way things are
going. At the very least, do we need to--based on your
experiences as CEO, rework the law? Do we need to help you in
that way or----
Mr. Blackwell. There is one answer and one answer only. The
answer is ``yes.'' Mr. Celli said it well. When this law was
being crafted, we were in a different time in our Nation's
financial history, and certainly at a different time in our
peace-war status.
All of the framers that I have spoken to of Public Law 106-
50 are still very supportive, Bill Elmore being the one who
wrote that particular piece for that particular group. The
issue isn't so much how we do what, when. It is how flexible we
are to provide what we need now and tomorrow.
I still believe in face-to-face education. I know that is a
slow methodology. I know that only works for certain groups of
people. I know that is expensive, not only in terms of
providing that service, but also in terms of the time it takes
out of a veteran-owned small business, to leave their business
for any particular period of time and / or take people out of
their business for any particular period of time: lost revenue,
lost ability to sell.
So in terms of just the simple answer ``yes,'' I think what
we need to do is completely look at the issues you have heard
of today.
And if I may, Madam Chair, I would say I would be happy to
in a formal way issue a rebuttal to what I have heard today and
to the other testimony. There are some inaccuracies, and I will
correct that in my rebuttal.
But to close on your question, Congressman, I would just
say that we really do need to look at the now 1.6 million Iraqi
/ Afghanistan veterans that we have--will break the two million
mark, the number in Vietnam, very shortly--we have with 300,000
young men and women coming back this year. We have 350,000 come
back in the next year. So when you look at those numbers, this
is a technologically savvy group of people. This is a group of
people that are used to gathering information in a different
way. They are as different from the caveman as we are today,
and I hope GEICO doesn't get upset, but the bottomline is we
have to continue to be flexible in our delivery system and not
held to a specific period of time.
I would love very much either to look at a rewrite or, in
the case of a bill currently being drafted, an entire
authorization of both the mission and vision of TVC.
Mr. Boozman. Thank you.
Mr. Denniston, can you tell us what the status is of
implementing the provisions of Public Law 109-461?
Mr. Denniston. As you know, the law requires that it become
effective 120 days after signature--180 days after signature.
That gives us until June 20th. So right now we are on target to
meet that. The draft rules have been written and they are going
through the internal clearance process. The Privacy Act issues
are being addressed at the Office of Management and Budget and
we will be ready on June 20th to kick the program off and make
the announcement.
Mr. Boozman. Thank you. I agree with you, Mr. Elmore, that
the answer really is the private sector and yet it is not too
much to ask that the public sector do what we ask them to do.
And when we talk to them individually, everybody is for this,
but it just doesn't filter down. It just doesn't get where it
is going so.
And then you have a situation we learned from the previous
panels. It really is a big deal if you can get some people to
get their foot in the door, and then they go out and mentor
others, and then they might have a different avenue that they
are interested in some other business, but it really does help,
pushing that thing forward.
So I guess my question is, Mr. Denniston, Mr. Elmore, could
you all possibly do a symposium where you really educated the
procurement officers? And I know you are trying to do this now.
But there is a--I think that again in hearing the other
panel, I think in hearing personal reference, there really is
not--and I don't mean this bad again--as one of the panelists
said, these guys are working hard, and they are overworked, but
in many cases there is an ignorance of what the President has
directed, and what the law is trying to direct.
If we could just get aggressive with some sort of mandatory
seminar, some sort of check the box, to help understand this, I
think that would be helpful. Is anything like that a
possibility?
Mr. Elmore. Sir, I think it is. There is actually a couple
of things I would like to share with you about this. Our new
administrator--and I am pleased that he is there, has been
there now 9 months--he came in, he put a number of initiatives
in motion. I have been with SBA almost 7 years now. Hard for me
to believe. And he came in and he actually engaged the
employees. He engaged our field people. He engaged our CPRs and
he engaged our district directors. He asked them what worked
and what didn't. He took all of that input and he designed a
number of special initiatives and created a number of internal
agency task forces, and amongst those are initiatives that look
at exactly what you are talking about.
We have responsibility for service-disabled veterans, we
have responsibility for women as well. We have responsibility
for 8(a) for HUB Zone, for small and disadvantaged business,
and we also do some work in the Native American community and
the international trade arena. All of these are being touched
by these task forces that are developing special and new
efforts to go out and do exactly what you talked about.
What kind of reporting do we get? How can we do it
electronically? Anybody that knows SBA knows we don't operate
at the scale of our friends at VA or Department of Defense. Or
Department of Labor for that matter. We are not a huge agency.
We have third parties we have to work through. So we are trying
to get our hands around contemporizing how we do exactly what
you ask, education for the procurement system, reporting for
that procurement system, and how others, myself included, gain
access to real time outputs from that procurement system so
that I don't have to sit in front of you a year and a half
later and report 2005 data.
Now, the 2006 data is not SBA's data. It comes from
somewhere else. And I am not trying to throw rocks at any of
our partners, but I am hampered without access to real-time
data about what is really happening out there. That is a real
frustration for not only me but the other professionals inside
SBA that want to do their job, want to do it right and want to
do it well.
So back to the point, the Administrator is leading this new
effort himself. I am doing 12-hour days. He is doing 14-hour
days. I can't keep up with him. I am grateful he is doing it,
although he is wearing me out, I will say that.
Let me go to the mentoring thing. I want to touch on that.
I think the one most important thing that our Nation can do is
engage what I call our military alumni business community. And
there really hasn't been a process to do that. What Walt talked
about, what my five centers do, what the centers that he funds
do, what CBE does, what Lou Celli does, the more that we engage
the men and women who went before us, the more we are going to
be able to engage the men and women who come behind us because,
by and large, anybody that knows this community--and, sir, you
know this--it is our kids that are going to carry the burden
next time. There are families that produce warriors in this
society and families that don't. And the best mentors at Walt's
program in St. Louis are two very successful veteran
businessmen whose sons have served in Iraq. These come from
families that don't have to serve in Iraq but these families
produce warriors, and they help their sons and daughters when
they come home.
So if I had a broad policy approach, I would suggest let's
get our hands around how do we engage this huge asset of the
already successful private business community that is out there
waiting to be mobilized in ways--and this is where the caveat
comes in. These men and women don't like the Federal
Government, by and large, very much.
So we have to do it in a way that really comes from that
community and is managed by that community. Because the first
woman on your first panel said it best: Mentorship is easy to
say, it is hard to do. It is based on personal relationships,
expertise sharing, and a willingness of people with ability to
take that ability and infuse it into people that they are
really now just getting to know. But if we could turn that on
it wouldn't take much money, but it would take coordination, we
could turn this whole arena in a way where 5 years, 2 years,
perhaps a year from now, we would be talking about how do we
manage the phenomenal growth and success of this whole arena,
not just including small business procurement from the Federal
Government.
Mr. Denniston. If I may, let me address your question from
the standpoint of procurement because I think that we are
making strides. As an example, the President's executive order,
one of the requirements in there was for DOD to have training
of all contracting and personnel in the government.
Within a week of the executive order being passed, the
Defense Acquisition University had an on-line course. That was
done. We in the Center for Veterans Enterprise have worked with
just about every large agency and what the requirements are for
Public Law 106-50 and Public Law 108-183. And we do that in a
lot of ways. A lot of times we are invited into the agencies to
train staff, on the requirements. We also go to a lot of events
in particular States. We work very closely with the Procurement
Technical Assistance Center that you have in Little Rock, that
one does a great job. We have done a number of events in San
Diego that bring in SPAWAR, which is obviously the largest
buyer, and all the contractors that support SPAWAR. We do it in
conjunction with the Procurement Technical Assistance Center,
we do it in conjunction with Bob Mulz who runs the Elite DVEV
network so that we have the opportunities to bring people in.
And I think that has gone well.
I have to tell you about yesterday. Yesterday, this week,
GSA has had their expo, which is where all the contractors that
are on the Federal supply schedule have an opportunity to
display their wares to buyers throughout the government
marketplace. On Tuesday, we had a whole veterans day down
there. In the expo we had a section of nothing but the service-
disabled vets that have won the GWAC contracts. And I wish you
could have been there to see the excitement that they had.
And Lurita Doan, the Administrator of GSA, and I walked
through there in the afternoon and talked to the veteran
owners. And one of the questions that we asked was: Now you
have the vehicle, what are you going to do to make it
successful? And every one of those companies had target
opportunities that they have identified in their marketing with
different agencies--and we are proud to say VA was the most one
mentioned--but they are excited about what we have got.
If you could see the excitement that we have when we have
the conference in the end of June in Las Vegas, or if you could
see the opportunities that are going to come out when we do the
accountability day--yeah, we know we have agencies that aren't
coming to the forefront the way they should. But you know what?
You also have to remember that contracting officers in the
government are overworked. It is a cultural issue. For the last
30 years, we have beat on contracting officers to make small
business opportunities available for minorities and women. Now
all of a sudden we are changing the dynamics and we are saying,
you did a great job there; now we want you to take care of
veterans and service-disabled vets, and the contract officers
and the program managers say, wait a minute, I have developed
this cadre of minority- and women-owned businesses that you
have asked me to support and I have done that. I don't want to
change. I have missions. I have risks that I have got to deal
with in delivering services to whoever my constituents are. And
now you are asking me to bring in a whole group of people. I am
not willing to take that risk.
So a lot of this is culture. That is why the importance of
having the people at the top be supportive of it the way our
Secretary and Deputy Secretary have done and say, by golly, we
are going to make this work one way or another, that is what it
takes.
I think we have enough of us to make this program
successful. I think it is now an issue of accountability.
Mr. Celli. May I dovetail on to that?
I was very excited to hear Scott talk about the change in
culture. I was asked to sit on a Committee--and I don't want
this to sound like it is a jab to GSA, I love GSA and I think
they are doing wonderful work. I was asked to sit on a steering
Committee for Veterans Procurement Day by the GSA. And the
regional administrator was there. Many of the experts you have
called today sat there and were part of that steering and
planning Committee.
In the meeting, they brought in some of their own
procurement officers to sit around so we could talk about how
to best do outreach to service-disabled veterans. That was
really the goal. What breakout sessions do we want to have, and
what is the best way to market and reach them? And that is my
expertise. I am not in procurement. I am not an expert in
procurement. I have been thrust into this arena because of the
work I do. But my expertise is in building businesses,
marketing, outreach, that is what I do best.
And as we started to go around the table, there was a pause
and one of the procurement officers asked if he could say
something. And his question was: Please explain to me the
service-disabled veteran thing. Is that 8(a)? And there was a
strong silence in the room. And there were three procurement
officers. A second one looked over and nodded in agreement and
the third one, who was very knowledgeable about veterans, said
no, that is not it. And the regional administrator at that time
stopped and said, you know, I am really glad that you asked
that question because what that does is tell me that we need to
do more training within our agency, with our procurement
officers.
So this is 2007. And you know we still have procurement
officers who don't understand the program. So I guess my
question would be: Is that a lack of emphasis from the top? Or,
I guess I am not sure. And I will leave it at that.
Ms. Herseth Sandlin. Thank you, Mr. Celli.
Ms. Davis do you have questions for the panel?
Mrs. DAVIS. Thank you, Madam Chair. Thank you to all of
you. I appreciate that, and I know it is late and I will try to
be very brief.
I just wanted to thank Mr. Blackwell. I appreciate your
being here and the work you did on behalf of at least one of my
constituents. And I know there are many more. I enjoy having
the opportunity to work on these issues and we certainly want
to continue to do that.
And I think that the overriding theme here in many ways has
been on accountability. We often ask, you know, it is the law,
what is the problem? Why can't we do a better job in oversight
and in trying to have enough enforcement so that people believe
that, in fact, there is a job to be done and that they know
that someone is out there to make sure that it happens.
But I wanted to just focus on one or two things quickly.
You mentioned the mentoring, and certainly Ms. Halfaker was
benefited by that. Are there programs in your respective
programs in which you have an opportunity to link experienced
veteran business entrepreneurs with newcomers to small
business, and has there been any evaluation on how that is
going? And what role would you like to see the Committee play
in trying to expand on that and, I guess, guarantee that that
element is working?
Mr. Elmore. Let me try to start and share at least the work
that we have done.
The five centers that I provide funds to, that provide
assistance to about 11,000 veterans and reservists a year, all
of those have a mentoring piece in the things that they do.
That is not the only thing they do, but that is one of the
elements in the agreement that they have with us.
Okay, how well does that work? I think it really probably
depends, more than anything else, on the skills of the
counselors in those specific programs and their ability or
their connection with the private business community, not just
the veterans looking for assistance. So I think it is pretty
spotty.
I think our SCORE volunteers, better than half of which are
veterans, some of them do take on a mentoring relationship with
their customers. Not all of them. Not every SCORE counselor is
capable of taking on a mentoring relationship. It is almost a
personal sort of a thing that has to happen.
Our Small Business Development Centers and our Women's
Business Centers also have mentoring, but it is not a specific
program. It is not a program that you can impose. It almost has
to be led by the community itself. And I think you saw evidence
of that at your first panel. Nobody said to Mark, help her. For
some reason, Mark began helping her. And there is no empirical
evidence in this, but I believe this in my heart and in my gut,
that veterans, probably more than any other group of
entrepreneurs in America, have an interest in, and have almost
a compulsion to a degree, to go back and provide this
assistance to those who come behind us.
I am not sure that I know how to do it. I just know that if
we can figure out how to unleash the private business
community, that is not looking for help. They do what I call,
``they want to help.'' There is a quiet pride there that we
have to give them an opportunity to exercise.
If I had a suggestion for Congress, it is not build another
Federal program, because most of these veterans aren't really
interested in helping the government do something again. Okay.
But you can help, because you are visible and you are leaders
in the American community, in your communities where you come
from.
One of the things I have tasked my district office
directors to do at our district outreach is to begin to develop
local volunteer lending Committees that would do exactly what
Walt said. Instead of a veteran going to a bank with a business
plan that isn't really ready, maybe isn't thought through,
isn't completed, didn't understand exactly what should be
there, whatever, develop these local volunteer Committees; let
our veterans come before them once a month, what I have
suggested, get their plans reviewed.
I think there are a number of things that come from that.
One is you get better business plans because the bankers, as
volunteers, are going to say. This isn't ready, this is--you
need to fix this, this will never work. Take it back and look
at it some more.
The other thing it will do is it will begin to build our
community inside America's lending community. One of the
strengths of us, our community, is that we are everywhere. But
at this point, the only ``everywhere'' we are talking about is
the Federal part of it. And you can help us lead an open
America to come back and help our sons and daughters come along
behind us and succeed. We are going to succeed, with or without
the government. We already do. government's role is to maximize
our resources and help succeed. But, ultimately, most that have
success is in the private sector.
And I would love to be part of a no cost--not another law--
let's figure out how to do this and finally unleash this
potential of these millions of men and women that are in
America.
Mr. Denniston. I would argue that it is already happening.
One of the dilemmas that we all had when we started our
respective programs is that nowhere could we find an
identifiable source of veteran-owned small businesses, so we
started from scratch and we started sort of building this up.
As an example, in San Diego, the elite DVD networking. One
of the reasons we have these community support groups of
networks of veteran-owned small businesses is to do exactly
that; is to help each other. Whether it is mentoring with
financing, whether it is mentoring from a standpoint of joint
venturing on prime contracts with the Federal Government, it is
happening. I think, as Bill mentioned, it is happening without
the government.
One of the misnomers, I think, of the Mentor Protege
programs that we have in the Federal agencies, that is not for
a start-up business. If your going to be a protege of a
mentor--remember, these mentors are the big guys. It is the
Northrops, it is the Boeings, it is the General Dynamics, and
there are huge expectations. And they are not going to enter
into a Mentor Protege relationship unless they have an
experience with you as a subcontractor.
One of the differences between doing business with the
government working as a prime contractor with us and as a sub,
we look at contracting from a government perspective; we are
dating you. We look at it from a contract-by-contract basis,
and if we find somebody better. Then we are going to go to
them.
The prime contractors, on the other hand, their philosophy
is more of a marriage. And if I am going to work with you, by
golly, I am going to make sure you grow and develop and I have
someone I can count on in future years.
And I think when small businesses get into Mentor Protege
agreements, what they find is there is a lot more that is
required of them than what is expected. So the really good
Mentor Protege programs we do in the government are for
companies that have been in existence, have some financial and
production wherewithal, and have experience in that
marketplace.
But, again, I think what is happening is we have a
groundswell of this mentoring thing of veterans wanting to help
other veterans. One of the new programs we hope to start in CVE
with our database of 15,000 veterans is twofold. One is to put
out a call to step up and volunteer to help another veteran
start a small business, and the other is the huge areas of
employment, because we know that veterans hire veterans.
Mr. Celli. First of all, I would like to recognize
Congresswoman Davis and her State as being an industry leader
in the way veterans procurement works at the State level. I
work with a couple of veterans from the State of California and
they couldn't be--they couldn't be happier at the way that
program has really spearheaded veterans procurement at the
State level.
When we talk about the mentoring and the coaching, similar
to what we heard Dawn Halfaker and Mark Gross, their
relationship, the question that you asked was if we have that
type of program established within the existing programs that
we now service. And, really, the answer is no. Any type of
mentoring that is done company to company, you know, neophyte
company or fledgling company to established company, is done on
the fly. It is done on the cuff. And it does happen, but it is
not evaluated because, again, it is--you know, there is a lot,
there is a lot there.
And one of the things I would really like to point out, and
I was waiting until you got back to me, is that something that
really may have been alluded to but wasn't really touched upon
in all of the testimony that you heard today, is that we are
essentially--really we are talking about two customers. We are
talking about new business start-ups as one customer base which
has its whole set of training and of assistance that it needs,
and then we are talking about established customers which have
companies that are trying to grow, whether that is through
procurement, whether that is through marketing and outreach at
the State level, where that is just trying to reach regular
commercial customers. So you really need to think about this
program as a two-pronged program, at a minimum, and look at
those two finite sets of customers with two very specific
needs.
As we set up conferences around the country, we always have
to identify, first, who is our base customer and core customer
going to be? Is it going to be the new customer or is it going
to be the established customer? And when we do that, that is
the way we market, and that is the way we set these programs
up.
I would like to respectfully disagree with Bill when he
talks about young veterans not liking the government. That was
in the original part of my testimony, in the executive summary,
I talk a little about the history of veterans through World War
II, and up to today, and how the prevailing sentiment has been
carried through with respect to how veterans are perceived, and
which directly relates to their success not only in the
marketplace but in the job market.
And though my colleagues here--they were raised in a
different time. And veterans now don't have that same, I think,
distrust of the government. I am not going to say that it
doesn't exist. But the prevailing questions that I hear when I
first get someone who is freshly off Active Duty is, isn't
there a government program to help me?
So it is more inquisitive and not how come the government
isn't there, or I don't want the government's help; it is more
of an expectation. Where is the government? And one of the
biggest misnomers within the community is how do I sign up for
the VA business loan, which they are confusing the home loan
with, and we have to tell them that it absolutely does not
exist.
So I think that veterans today absolutely expect the
government to be there for them with regard to some of the
programs we are talking about today.
Mr. Blackwell. If I may cap this in kind of a crass way, so
you will forgive my directness. Mentorship first. Mentorship
comes in as many different flavors as there are businesses.
Sometimes it is just an arm around a shoulder, saying, I am
here for you, pal, I can answer your questions; I can't get
involved in your business plan right now, but you call me if
you need me. That is one form of mentorship.
In Protege kind of activity, you are really talking about
the more technical sides of our business, the IT world, where
it makes sense to leverage and partner and do all those things.
And from a sheer outreach standpoint, where you can help us
most--and I mean, this in the most sincere way--you are looking
at a very small group of people today. But between Bill's group
and Scott's group, my staff, our staffs out in the field, you
are talking less than 50 people. You are talking less than 50
people to address the needs of over eight million veterans who
are either in business or want to start a business, not
counting all the Iraqi-Afghanistan veterans. If you want to
help us, stand with us. Help us have the oversight that is
needed from a congressional standpoint for you to give us
money.
We are delighted to report back to you. It was the most fun
I have ever had to do, and that is writing my fiscal year 2006
accomplishments to you and the President. I was amazed myself.
Will they get better? Absolutely. But we need your support.
No private-sector money is going to be given to us as TVC
without the partnership of the U.S. Congress, because the
private sector folks believe that it is in your responsibility
realm to stand with our veterans.
So as crass as it may sound, we are a little tiny group. We
don't get along all the time, I promise you that. We have very
differing opinions on the services we can and, frankly, are
able to provide, given that limited funding outreach.
I don't know who my customer is. Scott does, because he
keeps the database. But he is not allowed to share that with
me. So I am in the reactive mode more than the proactive mode.
As a business person, I think you will understand how
frustrating that can be. Bill has the same problem. Out of the
567 new business starts from TVC last year, Mr. Celli has 222
of those. He has four people.
Mr. Celli. I have two full-time people and two part-time
people.
Mr. Blackwell. So how much more can we do? I don't know.
Fund us. Give us a shot. We have a plan. It is working. We have
leveraged technology. You cannot find more dedicated people
than you have heard today on these panels, I promise you.
The team is here. Play with us. Thank you.
Mr. Celli. I also have another recommendation I would like
to bring to your attention with regard to promoting the
mentorship that we heard so much about. In the 2006 Small
Business Advisory Group report, one of the suggestions that we
had was to have the SBA create Regional Finance Bonding and
Security Veterans Small Business Advisory Councils. And what I
mean by that is having the SBA look at their regions and their
districts and say, go out and find some bankers and bonding
folks and create an advisory council to help vets.
When they do that, come back with recommendations, meet and
go out and find ways to promote veterans. When these public-
private partnerships start to develop and these bankers start
to come up with recommendations, they are going to own them.
And they are going to endorse them. And they are going to push
that down, you know, push back from the top down. And the next
thing you know, veterans will become important in the banking
community. Veterans will become important in the bonding
community. Veterans will become important in the business
community over all.
Mr. Elmore. Can I say one thing, Madam Chair?
Ms. Herseth Sandlin. Yes, because I have a number of
thoughts I still want to share with you too. Go ahead.
Mr. Elmore. This is my second testimony today, and so far I
haven't gotten in trouble. And I am kind of disappointed in
that.
Ms. Herseth Sandlin. Don't speak too prematurely.
Mr. Elmore. I won't go too far, I promise.
One of the things that was talked about when the community
came together, really years ago, but in 1997, 1998, 1999, to
create what became Public Law 106-50, none of us knew that that
was going to pass. The 1997 statute did not pass in the form
that we wrote it. Neither did the 1992 statute or the 1991
statute or the 1990 statute that we wrote. None of those
passed.
One of the things we talked about in 1998 and 1999 was the
Community Reinvestment Act. That is not within SBA's purview,
and this is where I get in trouble. But you know what? It is in
America's purview. That is where most capital comes from, is
from the banking community, the private equity markets out
there in the real world, not just the Federal part of this.
Perhaps that is as far as I will go, but I hope you get my hint
and I hope I didn't get in too much trouble.
Ms. Herseth Sandlin. I appreciate the hint. And I
appreciate--I am sure Ms. Davis and Mr. Boozman would agree
that we have a lot that we can work on here. But some of my
thoughts, if I might, because I think, Mr. Celli, you
ultimately got to the question I wanted to come back to you on.
What is the most immediate thing that you think the
Subcommittee can do to facilitate our common objective? And I
do want to come back to a point that you made, Mr. Elmore, just
to clarify, but also to respond, because I think Mr. Celli
addressed it, but what I heard you say wasn't maybe so much the
young veterans having this distrust, but the established
military alumni that are out there of that older generation. I
think that while that may be true, and I think there are a
variety of factors for where that distrust--from where it
stems--but I think one of them has to be a disappointment when
they see Federal agencies not living up to a modest 3 percent
set-aside in contracting.
While I understand, some of what you said previously as
well, that there is all this private sector opportunity. We
know that. The focus of the Office of the SBA isn't so much
just on the public contracting side, I think. As I said before,
the theme here is the issue of enforcement and accountability.
I think that there are things that we can do, working together
on the Subcommittee, that isn't passing more laws, but working
with our colleagues to figure out the best mechanism and the
best model to ensure that level of accountability beyond our
oversight hearings, that is very important--but beyond that, to
establish the commitment that can help erode over time that
distrust that I don't think is there to the same degree with
the younger generation, but to go to that point with the
younger generation.
It goes to the point Mr. Blackwell was making: How do we
best adapt our agencies and our programs to meet, to
transition, to serve different constituencies?
I do want to commend what you have been doing with that,
Mr. Blackwell, but while you have been doing that the mission
has changed. People observe that questions get raised that
aren't always answered to everybody's satisfaction. I hear what
you are saying about the small group we are dealing with the
dedicated group we are dealing with, the results and the
outcomes I think we have had in many cases.
But I think you will find a receptivity from me anyway,
more focused initially as it relates to enforcing laws we have
already on the books. I would like to work with you to figure
out ways--and I think I was going to ask you a question, Mr.
Denniston, about the PTACs and working with the veterans
themselves. But clearly we have got some work that we can
pursue on training procurement officers.
And I would be more comfortable at this stage--I am not
saying I am not willing to seek additional resources in a
pretty tight budget environment for additional programmatic
funding, but I also think, if people are overworked and if we
have procurement officers who do not know the difference
between 8(a) and the other programs that are geared toward our
service-connected disabled veterans, that there are some issues
here that we can focus on immediately in making sure we are
adequately resourcing that as we then work with you to identify
the best coordination of services and how we deliver those
benefits to different constituencies, whether they are based on
generation or, in terms of pursuing some of what we were just
talking about with the mentorship and the proteges.
So, Mrs. Davis, thank you for your time.
Thank you to all of our witnesses on this panel and the
preceding panels. I want to thank staff for their work in
getting us prepared for this hearing, but I am also going to
thank staff in advance for all of the work that we are going to
undertake in following up on all of the information we have
gathered at the hearing today.
With that, I will be around to visit with you maybe a
little bit more following the hearing, but again, thank you for
the statements, and for the information. We value your insight
and your ideas.
The hearing stands adjourned.
[Whereupon, at 5:42 p.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Opening Statement of the Hon. Stephanie Herseth Sandlin, Chairwoman,
Subcommittee on Economic Opportunity
Good afternoon ladies and gentlemen. The Veterans's Affairs
Economic Opportunity Subcommittee hearing on veterans entrepreneurship
and self employment will come to order.
Some of the panelists might recall a joint hearing we held with our
colleagues on the Committee on Small Business in May 2005 on the
subject of veteran small businesses. Today's hearing will build upon
that hearing as we receive testimony to explore the current state of
veterans' entrepreneurship and the every day problems they may face.
Small businesses are an essential component to the implementation
of strong economic development plans, especially in rural states like
South Dakota. Time and again, veterans have continually assisted in
preserving this critical element of our nation's economic prosperity.
In my home state of South Dakota, more than 17,000 veteran-owned small
businesses are operating. These brave men and women add tremendous
value to our economy when given the opportunity to start and manage
their own businesses.
Starting and growing a small business is no easy task and can be a
difficult challenge. I have heard of the many difficulties that
disabled veterans face when starting and developing a small business.
In addition, I have also heard from many members of the National Guard
and Reserve in South Dakota who find it challenging to maintain their
small businesses when deployed overseas to Iraq and Afghanistan.
I look forward to working with Ranking Member Boozman and Members
of this Subcommittee to focus our efforts on assisting our nation's
veterans with these challenges.
I look forward to working with Ranking Member Boozman and Members
of this Subcommittee to focus our efforts on assisting our Nation's
veterans with these challenges.
I would like to welcome our panelists testifying before the
Subcommittee today.
Joining us on our first panel is Ms. Dawn Halfaker, President and
Chief Executive Officer of Halfaker and Associates, LLC; Mr. Mark
Gross, President and Chief Executive Officer of Oak Grove Technologies;
and Mr. Anthony Jimenez, President and Chief Executive Officer of
MicroTech, LLC.
Joining us on our second panel of witnesses is Mr. Joe Wynn,
President and Chief Executive Officer of the Veterans Enterprise
Training and Service Group, Incorporated; Mr. Joseph Sharpe, Deputy
Director for the National Economics Commission of the American Legion;
and Mr. Richard Weidman, Director of government Relations for the
Vietnam Veterans of America.
Participating on our third panel is Mr. Walter Blackwell, President
and Chief Executive Officer for the Veterans Corporation; Mr. William
Elmore, Associate Administrator for the Veterans Business Development
of the U.S. Small Business Administration; Mr. Scott Denniston,
Director of Small and Disadvantaged Business Utilization for the U.S.
Department of Veterans Affairs; and Mr. Louis Celli, Chairman of the
Advisory Committee on Veterans Business Affairs for the U.S. Small
Business Administration.
We thank everyone for their statements this afternoon. We value
your insight and interest on this topic. This hearing stands adjourned.
Opening Statement of the Hon. John Boozman, Ranking Republican Member,
Subcommittee on Economic Opportunity
As one who started and successfully grew a small business, I know
first hand the difficulties and challenges faced by entrepreneurs. It
is almost a cliche that entrepreneurship is not for everyone and I
would hasten to add that it is not for the faint of heart. Building a
small business is hard work. It often pays less than working for
someone else. I suspect it usually involves sacrifices by the family
more often than working for corporate America. Did I mention that it is
hard work?
That is why, Madame Chairwoman, I thank you for taking time today
to review the performance of The Veterans Corporation. Judging by the
written testimonies we have received, there is a level of
dissatisfaction and disappointment with TVC's performance, especially
in its early days.
Public Law 106-50 established several purposes for TVC in stating,
``The purpose of the Corporation shall be (1) to expand the provision
of and improve access to technical assistance regarding
entrepreneurship for the Nation's veterans; and (2) to assist veterans,
including service-disabled veterans, with the formation and expansion
of small business concerns by working with and organization public and
private resources, including those o the Small Business Administration,
Department of Veterans Affairs'', . . . and several other private and
public institutions. Among the specifics, TVC was to develop a
``network of information and assistance.''
In a sense, the existence of TVC is an example of frustration with
the lack of services for veterans and disabled veterans by the Small
Business Administration. Public Law 106-50 also established the
Associate Administrator of Veterans Business Development at SBA and
charged the position with ``formulation, execution, and promotion of
policies and programs'' that benefit veterans and disabled veteran-
owned small businesses. Unfortunately, with a budget of only $900
thousand, the Associate Administrator is not in a position of power
within the agency and I look forward to hearing from him today.
The original legislation also terminated public funding for TVC
after Fiscal Year 2003. However, the Corporation has continued to
receive appropriated support through Fiscal Year 2006. So, the question
becomes, if TVC is not able to become self-supporting and does not
garner additional appropriations, what is the loss to the veteran-owned
small business community? I hope each of today's witnesses will take
the opportunity to address that specific question.
Finally, as those entrusted with making public policy we must ask
ourselves a couple questions. First, are we just reinventing the wheel,
and second, are existing Federal small business-related organizations,
if properly funded and lead, the appropriate place to promote veteran-
owned small business?
Madame Chairwoman, thanks again and I yield back.
Prepared Statement of F. Dawn Halfaker, Owner / Chief Executive
Officer, Halfaker and Associates, LLC, Washington, DC
Chairwoman Herseth Sandlin, Ranking Member Boozman and Subcommittee
Members, I greatly appreciate the opportunity to testify at this
hearing regarding Veterans Entrepreneurship and Self Employment and am
honored to represent a newer generation of entrepreneurs and Wounded
Warriors. I am CPT (Ret) Dawn Halfaker, Owner and CEO of Halfaker and
Associates, LLC. We are a Woman-Owned, Service-Disabled Veteran Owned,
HUB Zone Small Business providing national security consulting services
to the Federal Government. We are focused on mission support for the
War on Terrorism in the areas of Force Protection / Anti-Terrorism,
Homeland Security, Emergency Management, Physical Security and Chem /
Bio Defense Operations.
I started the company in 2006, a year and a half after I was
severely wounded in action in Iraq. As a result of my injuries, I lost
my right arm at the shoulder and even more devastating; I lost my
career as a military officer. Like most of the wounded warfighters who
are medically retired off active duty, I had no idea what I wanted to
do with my career but knew that I wanted to remain close to the fight
and continue my service to the country in some capacity.
As a business owner, my company enables me to do just that. I have
the opportunity to use my military skills and expertise to continue my
service as well as the ability to work with and provide jobs for other
veterans. My company competes for work within the Federal Government,
primarily DoD, and targets contracting opportunities based not only on
our aforementioned core competencies but our ability to hire wounded
warriors to perform the work; thus giving them back a career they lost.
However, in the short year and a half I have been doing business
with the government, I have learned that my vision is not easily
realized or necessarily shared. As it pertains to this hearing, I
believe there are significant improvements to be made in the
procurement system with regard service-disabled veteran-owned
businesses and the ability of agencies to achieve the 3 percent goal. I
will identify the main obstacle I have encountered that I believe to be
an unfortunate systemic problem.
I was recently at a meeting with one of my clients in the Pentagon
and was introduced to another individual who happened to be a
contracting officer. It was mentioned that my company is a service-
disabled veteran-owned business and the individual replied, ``Yeah, you
and everyone else.'' I believe this remark illustrates a general
attitude toward service-disabled veteran-owned businesses that implies
we do not deserve a separate small business category are should not be
entitled to special treatment. I would like to contend that we are not
seeking special treatment but fair treatment. Additionally, we are not
like everyone else in that we have served our country proudly and made
significant sacrifices in doing so. With that said, there should be
incentives to do business with veterans, and proportionately, we should
have the ability to not only compete for business in our own category
but have the privilege of a non-competitive sole-source award. This
procurement tool would enable service-disabled veteran-owned businesses
to be looked upon favorably and allow businesses like mine to present
our customers with a fast and effective contract solution.
Though there has been a concerted effort by veterans, VSOs,
businessowners and lawmakers to push agencies toward the 3 percent
goal, we will never achieve it by simply hoping that contracting
officers do the right thing. It is my belief that service-disabled
veterans and wounded warriors should have the same consideration and
opportunities at least equal to anyone else in America.
I thank you again for this opportunity to appear before you today.
This concludes my testimony and I welcome your questions.
Prepared Statement of Mark Gross, President and Chief Executive
Officer, Oak Grove Technologies, Raleigh, NC
Good afternoon Chairman Herseth-Sandlin, Ranking Member Boozman and
Members of this Subcommittee. Thank you for the invitation to come
before you and share my experiences and work within the veteran
business owner community.
I am a veteran of the United States Army, and founder of Oak Grove
Technologies, a Service Disabled Veteran owned small business, founded
at my kitchen table 5 years ago this past August. Today, I am proud to
say I employ over 140 employees, over 70 percent of those are veterans,
and 16 percent are service disabled veterans. Geographically we are
dispersed in 16 states, as well as supporting both OEF and OIF in both
Afghanistan and Iraq.
I am here today to offer testimony on behalf of the Veterans
Business Community as well as to offer you the benefit of research and
the opinion of our Veterans Small Business Advisory Committee, which
was established under PL 106-50.
The question before this Committee today is, ``What is the State of
Veterans Entrepreneurship, obstacles faced by aspiring entrepreneurs,
programs being relied upon by Veterans and the current status of
Federally funded programs to assist the Veterans''
I feel that I am uniquely qualified to answer that question as I
have not only built a very successful business in this economic
climate, but I have also taken on the task of mentor to a number of
other Service Disabled Veteran Owned Businesses.
In my opinion Congress has done an outstanding job in passing
legislation such as 106-50 and 108-183, both of which established
Service Disabled Veteran goals and mandates in Federal contracting.
Some of the problems today revolve around accountability within
Agencies to meet these goals. I am here to offer my views on what can
be done to ensure the state of veteran's entrepreneurship within the
Federal Government.
Congress and specifically this Committee have been working for
veteran businessowners for years. This issue is as important to our
veterans as it is to you. What we've seen thus far from many Federal
Agencies has been a cavalier attitude toward the 3 percent goal,
believing that this mandate doesn't apply to them. You have heard a lot
of numbers and data today so I don't want to overstate what you have
already heard, but suffice to say despite all of these mandates
establishing the governmentwide 3 percent contracting goal with SDVOBs,
no agency has met this standard. In 2005 alone, the Department of
Defense awarded 0.499 percent of contracts to SDVOBs. DOD accounts for
roughly 70 percent of all government procurement spending, yet its
repeated inability to meet service-disabled veteran contracting goals
makes it all but impossible for the Federal Government as a whole to
meet the 3 percent goal.
I would like to offer Six recommendations to meet the 3 percent
procurement goal;
Eliminate the ``Rule of Two'' wherein a contracting
officer has to know of two or more SDVOB's before a sole source
contract award can be made. This is the only similar requirement for
any of the statutory programs.
Create a level playing field between the statutory
programs by changing the use of ``MAY'' to ``Shall'' when using
restricted competition for SDVOB's.
Small business subcontracting plans, including all
details of the plans, required by large prime contractors, should be
made public and accessible electronically or on forms 294 / 295 upon
request. Mandate that contracting officers impose liquidated damages,
as predicated in FAR Part 19.705-07 for those large companies that fail
to demonstrate good faith efforts to fulfill the requirements of their
subcontract plans.
Close loopholes in the GSA Schedule (FAR Part 8) wherein
large businesses are allowed to take away business intended for small
business, or mandate that the Federal Agencies disclose percentage of
overall contracting dollars procured to small business' through the GSA
Schedules.
Reward / Penalize those agencies that meet or don't meet
the 3 percent SDVO requirement
Strengthen the SDVOB program by increasing contract
awards, resources, and support without including SDVOBs into the 8a
program. The 8a program was created to assist minorities with a
business development program. This program concentrates on
socioeconomic factors which SDVOBs simply do not fall into as a whole.
The SDVOB program is a program earned by each and every Service
Disabled Business Owner based on the sacrifices they made and tenacity
they have displayed by becoming entrepreneurs.
The one Federal program that Congress did create was the Veterans
Corporation. I am quite familiar with them as at one point were
collocated in the same building in Alexandria. I initially sought
assistance from them in 2003, I was left then, and am still left today
questioning what they do, and more importantly, value they bring to the
veteran entrepreneur community. Much of the Veterans outreach is
provided by both the Department of Veterans Affairs Small Business
Office and the Army Small business office.
Some of the offices that should be recognized for taking the lead
in outreach are the VA and the Army Small Business Office. They took
the lead 3 years ago to create the National Veterans Conference, which
is a conference held annually in June in Las Vegas, NV. I am proud to
say that we have sponsored this event every year, and this year's total
numbers for attendees will be in the neighborhood of 2500 people and
veteran business.
We are proud to say we are the first SDVO small business in the DOD
Mentor Protege Program as created by 108-183, and this year were
awarded the DOD Nunn Perry Award.
As an entrepreneur and Veteran, the climate certainly has gotten
better over the past 7 years, and we still have a long way to go, but
I'm confident that Congress, many of the Federal Agencies such as
Department of the Army, and the Department of Veterans, are committed
to this cause.
I thank you for your time and your efforts to improve the Federal
contracting climate for Service Disabled Veteran Businesses.
Prepared Statement of Anthony R. Jimenez, President and Chief Executive
Officer, MicroTech, LLC, Vienna, VA
Good morning. It's a privilege to be here today. I want to thank
the Committee for allowing me to share my thoughts regarding veterans'
entrepreneurship, Veteran-Owned Small Business and Service-Disabled
Veteran-Owned Small Business opportunities in the Federal Government,
and in particular, current programs funded by the Federal Government. I
believe that helping veterans build successful businesses is not just
right for veterans, in recognition of the service and sacrifice they
have given this country, but it also right for the country as a whole.
Veteran-Owned Small Businesses and Service-Disabled Veteran-Owned Small
Businesses can, and should, become a powerful job creation engine and
force for economic development.
I'd like to begin today by clearing up what I believe to be a
misconception about the primary obstacles facing Service-Disabled
Veteran-Owned Small Businesses. My sense is that there is a widely held
belief that what Service-Disabled Veteran-Owned Small Businesses need
most to succeed is access to training, capital and other elements that
support business development goals.
The Small Business Administration's Advisory Committee on Veterans
Business Affairs has repeatedly reported on a number of issues facing
Veteran-Owned Small Businesses and Service-Disabled Veteran-Owned Small
Businesses: The most significant of these issues included lack of
sufficient representation for businesses owned by veterans at the SBA,
lack of access to capital and surety bonding and a need for training
and education of veteran entrepreneurs. These factors are all
significant and real, and should be addressed. But in my view, they are
not the most significant factors.
In response to these perceived needs, the Veteran's Corporation was
created to provide training and business development assistance to
veterans starting businesses. The Veteran's Corporation provides many
useful tools for veterans looking to start a business, such as help
with business plans, advice about contracting with the government,
assistance with obtaining financing and so on. These are all critical
elements in the success of any new business and I am sure this type of
assistance has helped many businesses owned by veterans grow and
develop and has been gratefully received. But, these are not the
primary factors holding back businesses owned by veterans, especially
Service-Disabled Veteran-Owned Small Businesses that are already
established and are interested in working with the Federal Government.
These companies need advocacy and opportunity more than they need
startup support or business instruction.
In fact, there are already over 9,600 Service-Disabled Veteran
Owned Small Businesses and over 37,000 Veteran-Owned Small Businesses,
which have negotiated all the hurdles required to become registered in
the CCR. Based on my personal knowledge and experience competing with
these companies, I believe that the majority of these small businesses
stand ready to deliver quality services to the government right now.
I believe that what Service-Disabled Veteran-Owned Small Businesses
need most are genuine opportunities, which allow them to demonstrate
and grow their capabilities. To date, the government's record of
identifying, setting-aside opportunities and then awarding work to
Service-Disabled Veteran-Owned Small Businesses is disappointing at
best. The law mandates that the governmentwide goal for participation
in government awards by Service-Disabled Veteran-Owned Small Businesses
is three (3) percent of the total value of all contracts awarded each
year. To date, the government has fallen far short of that goal. In
fact, between 2001 and 2005, the Department of Defense, an agency one
would think would be especially sensitive to veterans issues and
opportunities for veterans, has never awarded even one half of one
percent of its contract awards to Service-Disabled Veteran-Owned Small
Businesses; in some of those years it was significantly less than one
half of one percent. The performance of other government agencies in
this area is similar. To date, only a small number of Federal Agencies
have successfully reached the prime contracting goal of 3 percent for
Service-Disabled Veteran-Owned Small Businesses.
Let's contrast the experience of the approximately 9,600 registered
Service-Disabled Veteran--Owned Small Businesses to that of the
approximately 9,900 or so businesses currently certified as 8(a) small
disadvantaged. The legally mandated goal for 8(a) set-asides is also 3
percent of the total value of government contracts awarded. For 8(a)
businesses, this target is met consistently through-out the government,
nearly across the board.
These circumstances translate into a non-level playing field for
the Service-Disabled Veteran-Owned Small Businesses. Turning again to
the SBA figures for DoD for the years 2001 through 2005, we find the
total targets for both 8(a) and SDVOSB spending was over $31 billion.
This target was essentially met for the 8(a)'s. The actual amount
awarded to Service-Disabled Veteran-Owned Small Businesses was just
under $7B. This represents a deficit of nearly $25 billion in
opportunities to perform and grow that were never offered to the
Service-Disabled Veteran-Owned Small Businesses
Despite this disparity, according to the SBA, veteran entrepreneurs
are successfully self-employed at a higher rate than any other group of
American citizens. Imagine what this group could do with the
opportunities that have been afforded to 8(a) small businesses! If we
create the opportunities, veterans will respond.
Why does this disparity of opportunity occur and what can be done
about it?
I believe it has to do with two factors: a lack of commitment to
provide mechanisms for Service-Disabled Veteran-Owned Small Businesses
to become successful large businesses; and, a lack knowledge of and
current perceptions about Service-Disabled Veteran-Owned Small
Businesses among the government contracting community. Contract
Officers and their customers are simply not aware of the depth and
breadth of options available to them that can be provided by Service-
Disabled Veteran-Owned Small Businesses. I believe Contracting Officers
are reluctant to set large, complex efforts aside for Service-Disabled
Veteran-Owned Small Businesses for fear that the pool of respondents
will be too small or their offerings too expensive or non-competitive.
This reluctance is felt by the general business community. Large
businesses are less likely to want to partner with and mentor Service-
Disabled Veteran-Owned Small Businesses if they perceive resistance on
the part of the contracting community or if it seems the commitment to
develop, grow, and mentor Service-Disabled Veteran-Owned Small
Businesses is not genuine.
With respect to the Service-Disabled Veteran-Owned Small
Businesses' ability to compete, I know from experience it can be
significant. To win our second largest contract, which was a Service-
Disabled Veteran-Owned Small Business set-aside; my company had to
compete against 50 other Service-Disabled Veteran-Owned Small
Businesses to win the work. We have successfully completed our base
year of performance and are now in our first option year. Our customer
is receiving top-notch service at a very competitive price and, having
seen our capabilities first hand, understands the value of setting-
aside opportunities for Service-Disabled Veteran-Owned Small
Businesses. We were also one of 40-plus companies to receive an award
on the U.S. General Services Administration (GSA) Veterans Technology
Services (VETS) GWAC (Government-Wide Acquisition Contract). Over 200
Service-Disabled Veteran-Owned Small Businesses bid on that opportunity
in a very competitive selection process. Another outstanding example of
veteran entrepreneurship is the National Aeronautic and Space
Administration (NASA) SEWP (Solutions for Enterprise-Wide Procurement)
GWAC (Government-Wide Acquisition Contract). Often referred to as one
of the best GWACs in the Federal Government, SEWP provides the latest
in Information Technology (IT) products for all Federal Agencies. Until
recently, SEWP had only large, small and 8(a) primes providing the
latest in Information Technology (IT) products. On May 1, 2007 with the
award of SEWP IV, six (6) Service-Disabled Veteran-Owned Small
Businesses are now prime contractors on SEWP IV. This means that
Federal agencies now have the ability to procure the latest in
Information Technology (IT) products from Service-Disabled Veteran-
Owned Small Businesses at a very competitive price.
This is where advocacy comes in. These success stories need to be
told. government Program Managers, Contracting Officers and the
business community at large should understand the significance and
importance of supporting small businesses owned by veterans; and, they
need to hear concrete examples of success stories where businesses
owned by veterans have delivered excellent results. I think this type
of educational advocacy should become an important part of the charter
of Federally funded programs like Veterans Corporation as well as the
Small Business Administration.
Another important resource that could help create opportunities for
Service-Disabled Veteran-Owned Small Business is the value that is
gained when a large business partners with a Service-Disabled Veteran-
Owned Small Business to create or generate opportunities. For many
years there has been an 8(a) Mentor Protege program at the Small
Business Administration (SBA) that enhances the capability of 8(a)
participants to compete more successfully for Federal Government
contracts. The program encourages private-sector relationships and
expands SBA's efforts to identify and respond to the developmental
needs of 8(a) clients, but today there is nothing similar at for
Service-Disabled Veteran-Owned Small Businesses at the Small Business
Administration (SBA).
I know personally how well it can work when government and large
businesses partner together to facilitate opportunities for Service-
Disabled Veteran-Owned Small Businesses. Our largest contract is with
the U.S. Department of Veterans Affairs. As a prime contractor, we
provide Enterprise Solutions for Microsoft products and associated
services to the entire U.S. Department of Veteran Affairs. The contract
is valued at over $56 million per year and is the largest contract of
its kind ever awarded to a Service-Disabled Veteran-Owned Small
Businesses. This contract would never have happened had it not been for
VA's Office of Information and Technology (OIT). In particular, Mr.
Craig Niedermeier and the people in his office, coupled with the great
efforts from the Contracting Officer, Mr. Daniel Nascimento, and all of
the great people in his office went the distance to find ways to offer
this significant opportunity to service disabled veteran owned firms.
This contract is an example of VA's commitment to Service-Disabled
Veteran-Owned Small Businesses and was awarded by VA using a GSA
schedule 70.
Mr. Niedermeier and Mr. Nascimento were able to identify several
Service-Disabled Veteran-Owned Small Businesses that could not only
provide the Microsoft products, services and solutions VA needed, but
were capable of successfully delivering on such a large and complex
opportunity. Once potential Service-Disabled Veteran-Owned Small
Business bidders were identified each business worked hand-in-hand with
the Enterprise Solutions Team from Microsoft led by Brian Roach, Geary
Brummell, and Marc MacDonald. Several Large Account Resellers (LARs)
were partnered with qualified Service-Disabled Veteran-Owned Small
Businesses and a number of very competitive bids were submitted. My
company worked with Software Spectrum, who understood the three (3)
percent governmentwide goal and the need to mentor and assist Service-
Disabled Veteran-Owned Small Businesses to meet that goal. Our
relationship with Software Spectrum continues to expand and the skill
transfer and knowledge transfer that VA has hoped for has in fact taken
place. We completed our base year of performance last month and are now
in our first option year. VA is receiving top-notch products and
service at a very competitive price and is very pleased with both our
services and our process for delivering products and solutions. This
contract continues to be a sterling example of what can happen when the
big business works with small business to create and / or expand
business opportunities for Service-Disabled Veteran-Owned Small
Businesses. Without large businesses participation and support and
without the government's commitment to identify opportunities and set-
them aside for Service-Disabled Veteran-Owned Small Businesses the
likelihood that Service-Disabled Veteran-Owned Small Businesses will
become successful large businesses is significantly diminished.
I hope that my words have provided additional insight into
veterans' entrepreneurship and in particular, the need to define the
mission of current programs funded by the Federal Government. With the
right focus, many of these programs can serve as opportunity advocates
and can help ensure Veteran-Owned Small Business and Service-Disabled
Veteran-Owned Small Business have the opportunities they need to be
successful. I am convinced that the harder the government works to
identify opportunities for Veteran-Owned Small Business and Service-
Disabled Veteran-Owned Small Business the more success stories there
will be.
Prepred Statement of Joe Wynn, President, Veterans Enterprise Training
and Services Group, Inc. (VETS Group), and Member, Veterans
Entrepreneurship Task Force (VET-Force)
EXECUTIVE SUMMARY
In the past few years, two major pieces of Federal legislation have
really set the stage for the emergence of today's veteran
entrepreneurs. When Congress passed the Veterans Entrepreneurship and
Small Business Development Act 1999 (Public Law (PL) 106-50), it stated
in its findings that America had not done nearly enough to `assist
veterans, particularly service-disabled veterans, in playing a greater
role in the economy of the United States by forming and expanding small
business enterprises.'
PL 106-50 thus called for the creation of new entities and the
restructuring of existing ones in order to assist veterans in pursuit
of entrepreneurship. Under this law, SBA's Office of Veterans Business
Development, the Department of Veterans Affairs' Center for Veterans
Enterprise, and the National Veterans Business Development Corporation
were created.
While PL 106-50 also established a 3 percent procurement goal for
federal agencies and prime contractors to purchase goods and services
from service-disabled veteran owned businesses, it did not go far
enough in giving contracting officials a vehicle by which to achieve
the goals. Thus, a second piece of major legislation was enacted as
part of the Veterans Benefits Act of 2003 (Public Law 108-183). section
308 called for the creation of a Veterans Procurement Program and made
it mandatory, that Federal agencies and prime contractors procure a
minimum of 3 percent of all of their goods and services from service-
disabled veteran owned businesses.
The insertion of that mandatory language into the legislation
effectively created quite a stir in the Federal procurement community.
Wherein agencies were still paying little attention to veteran owned
small businesses, the mandatory language has caused them to stop and
take notice.
And to bring further fuel to the fervor, the President of the
United States issued an Executive Order in October 2004, directing
agencies to carry out the law now! Agencies have been instructed to
designate a senior-level official, to be held accountable for
submitting a strategic plan showing how and when they will achieve the
3 percent contracting goal for service-disabled veteran owned
businesses.
The VETS Group is proud to have been a part of the collective
effort of those veterans' advocates who pushed for the development and
implementation of these landmark decisions to expand veterans'
entrepreneurship.
But after more than 7 years, two new laws and a Presidential
Executive Order, Federal agencies and prime contractors are still
scrambling to find service-disabled and veteran owned businesses that
are capable and qualified to satisfy their requirements. And
unfortunately, of the 3 government entities created for veteran
businessowners, one appears to be misdirected, the other is still
buried in the shadows, while the third is just beginning to show some
promise.
INTRO:
Good Afternoon, Chairwoman Herseth-Sandlin, and other members of
this Subcommittee.
Let me first thank you for the opportunity to come before you today
to share some of my views and the collective views of many Veterans and
Service Disabled Veteran businessowners; veterans who served with
honor, and many who received distinguished honors for displaying valor
and courage during their periods of military service for this country.
Though my time of service was many years ago, as a veteran of the U.S.
Air Force with the 66th Strategic Missile Squadron, I still have a very
vivid memory of the military experience.
As a lifetime Member of the National Association for Black
Veterans, I have spent the past 16 years assisting Veterans, and in
recent years serving as a Commissioner of the Congressionally appointed
Veterans Disability Benefits Commission, Treasurer for the Veterans
Entrepreneurship Task Force (VET-Force), as Senior Advisor to the
Vietnam Veterans of America, and President of the Veterans Enterprise
Training & Services Group (VETS Group).
In serving in these roles, I have seen that veterans often risk
their lives to preserve the American Dream of freedom and prosperity.
However, too little is being done to assist veterans, particularly
service-disabled veterans, to achieve the American Dream they fought so
hard to protect. It is well known that one of the best ways to get
ahead is by obtaining a good job. But by starting or expanding your own
small business, you may achieve financial independence.
Since the Vietnam Era, America has been involved in numerous
conflicts, missions, and peacekeeping endeavors. And since the tragedy
that overtook America on September 11, 2001, we have been engaged in
the Global War on Terrorism, and even now continuing to increase the
number of troops in Iraq and Afghanistan despite the overwhelming
opinion to the contrary. A new generation of veterans now exists; they
are well trained, loyal, battle-tested and under-employed. `As a
nation, we have been unsuccessful in providing the originally promised
assistance our veterans have earned, deserved, and required so that
they would have the opportunity to be as successful in their civilian
pursuits as they were in their military assignments.' (VET-Force Report
to the Nation 2005).
If veterans and service-disabled veteran owned businesses are to
succeed in the public sector they will have to overcome a number of
impediments: (1) The pervasive ignorance of the law and resistance to
change across all agencies; (2) No enforcement of prime subcontracting
plans; (3) Inaccurate agency data, miscodings, and double counting; (4)
The perception that the procurement pie for small businesses is
shrinking; and (5) Contract Bundling.
Veteran service providers must assist in identifying and
registering the capabilities of veteran businessowners where required,
become knowledgeable of all prime contractors and their subcontractor
needs, develop relationships with agency procurement officers, and
develop the ability to match veteran businesses with procurement
opportunities.
Though the legislation referred to above has created an urgent need
for service-disabled and veteran owned businesses, it did not create a
business development program for veterans. However, it did create the
Veterans Corp, the Office of Veterans Business Development and the
Center for Veterans Enterprise to fill that need.
THE VETERANS CORPORATION (TVC)
The entity that was supposed to be the National Advocate for
Veteran businessowners, has just not measured up to the task and
continues to be struggling for the right direction. Much has been said
about the seemingly poor performance of the National Veterans Business
Development Program, aka the Veterans Corporation (TVC) to implement a
program to assist veterans across the Nation with starting or expanding
their own small businesses. And seemingly, there has been even less
evidence of TVC providing support for those Service-Disabled Veteran
Owned Businesses participating in the Federal marketplace.
TVC's performance continues to be viewed by many as less than
adequate in light of the more than $14 million appropriated to TVC by
Congress over the past few years. This has continued to be the big
point of controversy within the veteran's community--just how much
should or could have been done with that much money in 6 years. Since
TVC started, it has been under the leadership of at least four
Executive Directors, had three strategic plan changes, and at least two
program changes. Staff levels have since been reduced and the service
offerings are still mostly contracted out or performed by other
organizations. Most of the Board members have been very distant and
detached from the veteran's community.
Many veterans still do not know that the Veterans Corporation even
exits, partly because they have no physical facility in the community
that bears the name of the Veterans Corporation nor any public space
where veterans are welcomed to come and obtain information about their
services or their business needs. Their new offices are now located on
`Lobby Row' (downtown K Street N.W., Washington D.C. where many of the
highest paid lobbyists are reported to have offices).
By working in the veterans community for more than 16 years as a
Member of several veteran service organizations, including the Veterans
Entrepreneurship Task Force (VET-Force), and President of the Veterans
Enterprise Training and Services Group, here are some of the concerns I
continue to receive from veterans, veteran businessowners, and others
familiar with TVC and Public Law 106-50.
The number of veterans visiting a website (hits), whether for
information or education, is not a true measurement of the number of
new veteran entrepreneurs, nor does it indicate the number of veteran
businesses that expanded. Folks want to know did TVC do something to
expand the pool of capable and qualified veteran and service disabled
veteran owned businesses or were they instrumental in helping a veteran
obtain a contract. And if so, who are these veteran businessowners, how
many are there, what types of businesses increased or were created, and
where are they located?
There are a lot of websites on the Internet that provide
information about starting or expanding a small business. Is adding the
TVC website to the list the big difference for veterans? The SBA has
been recognized for its excellent website for providing small business
information and training for years. And since PL 106-50 directed the
SBA and its SBDCs to provide more services to veterans, why should TVC
duplicate what is already available and funded?
There are already more than 1400 small business development centers
around the country, each having access via a website and most
affiliated with a college or university. The small business development
centers also provide one-on-one counseling, classroom training,
workshops and seminars. TVC provides limited funding for 4 Veteran
Business Resource Centers via other service providers. At the rate of 4
limited centers in 6 years, how long will it take them to match the
1400 centers already in operation by the SBDCs? In addition, the number
of veterans contacting these centers is counted as success instead of
the number of veteran businesses started and contracts awarded.
Since Congress established a 3 percent goal for Federal Contracting
with Veteran and Service Disabled Veteran Owned Businesses, including a
3 percent goal for Prime Contractors. (Primes are those large
businesses that have contracts over $500,000 with the Federal
Government), it's not hard to see why many veteran businessowners and
potential veteran businessowners were looking to learn how to do
business with the Federal Government. After all, there are only a
couple of states that support a percentage goal directed toward
veterans.
So TVC should consider developing more programs to offer assistance
in Federal contracting. Many members of the veteran's community viewed
PL 106-50 as an inside track to federal contracting. However, from the
perspective of the Federal contracting community, the OSDBUs, the
Contracting Officers, and the Procurement Officials, it was just viewed
as another program with a ``nice idea.'' When veteran businessowners
began to pursue Federal contracts they were told all to often, ``PL
106-50 is just a goal. There are no teeth in it. We still don't have
the mandatory authority to set contracts aside just for veterans.'' And
with no apparent help from TVC the veterans community turned to the
Veterans Entrepreneurship Task Force (VET-Force) and other veteran
service organizations.
So VET-Force, the nonprofit, informal, organization comprised of
representatives from veteran service organizations, veteran
businessowners, and other members of the community, the group that had
initiated the movement to push for and oversee the implementation of PL
106-50, began to call for additional legislation to correct the
apparent shortcomings regarding Federal contracting for veteran
businessowners.
As a result of their efforts, of which TVC representatives were
always invited to participate in the planning meetings of the Task
Force, corrective language was drafted and inserted into the Veterans
Benefits Act of 2003 under section 308 (PL 108-183). That language
called for the creation of a Veterans Procurement Program and made it
``mandatory'' that the Federal Government and its Primes procure a
minimum of 3 percent of all of its goods and services from Service
Disabled Veteran Owned Businesses. Yet even after passage of this new
legislation, which was obviously an extension of what was called for
under PL 106-50, TVC continued to stay on the track of small business
start ups with no special assistance for veteran or service disabled
veteran businessowners seeking to enter the Federal marketplace.
In the winter of 2004, President Bush issued an Executive Order,
13-360, through the Office of Federal Procurement Policy and the SBA,
directing Federal agencies to develop and implement a strategic plan to
increase contracting opportunities for service disabled veteran owned
businesses so that they could begin to receive the intended benefits of
PL 108-183 and PL 106-50. After several months of delay, many agencies
began to develop and make public their strategic plans. But many of
them would point out that: ``even though PL 108-183 created a mandatory
requirement to contract with service disabled veteran owned businesses,
it did not provide any funding to assist with the development of
veteran businesses.''
So agencies and veterans turned to the Veterans Corporation for
assistance with developing veteran businesses for Federal contracting,
only to be disappointed. TVC now promotes programs for Surety Bonding
and Access to Capital, but they have indicated that only a few veterans
are even in the process of applying for these programs. And it appears
that each veteran must pay a $99 referral fee to TVC to find out even
if these programs will work for them.
As part of the directives of the Executive Order, agencies were
told to increase their outreach efforts to veteran businessowners to
make them more aware of the procurement opportunities that exist within
the Federal marketplace. So many agencies have been organizing
procurement conferences, expos, trade shows, and so forth. targeted to
SDVOBs. Yet the Veterans Corporation with its $14+ million in
appropriations, has yet to organize a conference on behalf of the
thousands of veteran businessowners across the nation.
Even after many veterans were complaining about the ineffectiveness
of the government sponsored events, TVC still never stepped up to the
plate to organize a veterans procurement event from the perspective of
the veteran businessowners. Yet they did cosponsor a DOD procurement
event for veterans last year (by default), and planning to co-sponsor a
DOE small business event this year which is not targeted to veterans.
However, the VA and the Army have responded with 2 national veterans
procurement conferences based on the feedback of the veterans business
community and a 3rd one is already scheduled. Other agencies have since
done likewise.
If you talk to anybody from the OSDBUs to the contracting officers
to the small business specialists to the small business ownerys
themselves, they all will tell you that building relationships with
government customers is key and often essential to obtaining government
contracts. But veteran small businessowners are not unlike other small
businessowners when it comes to time and resources and the shortage
thereof. So it becomes a challenge to track down and spend time
developing relationships with potential government customers while
attending to the present workload
Since there are very few veteran sponsored conferences, the
government-sponsored conferences become a way to meet several potential
customers all in one place. But often what is missing is a voice of
authority preceding or backing up the veteran businessowner when they
interact with a Federal agency representative who can help clarify and
reinforce the requirements of the legislation and the importance of
contracting with SDVOBs. Since TVC has not been that voice, that
support, that advocate, veteran businessowners have turned to the VET-
Force and now also NaVOBA (the National Veteran-Owned Business
Association).
And finally, on cash flow and access to capital, many believed in
the beginning that PL 106-50 would provide some actual cash to veteran
owned businesses. TVC started to promote access to capital also. But
when it became clear that direct cash loans were not included, veterans
were referred to the SBA loan guarantee programs instead. Now TVC will
refer you to their Access to Capital Program, but it requires a $99
referral fee to TVC before services will be provided.
THE OFFICE OF VETERANS BUSINESS DEVELOPMENT (OVBD)
The SBA, the agency responsible for the development of U.S. small
businesses, has received very little in Federal dollars to assist
veterans in pursuit of entrepreneurship. Other agencies have only
received dollars for promotional activities, such as conferences,
exhibits, and materials but not for veterans' business development,
education, and training. Thus veterans wanting to enter the Federal
marketplace must work their way through a maze of disassociated and
often disinterested and sometimes untrustworthy business resource
providers in order to get what they need to compete. Not to mention
dealing with the inconsistency of fees for services from one resource
provider to another.
An even more compelling reason to develop programs to assist
veterans interested in entrepreneurship is the War on Terrorism being
waged in Afghanistan and Iraq. This war has dislocated thousands of men
and women in the Armed Forces, National Guard, and Reserves. Many of
these veterans have sustained debilitating injuries, which will limit
their ability to return to or obtain meaningful occupations. These are
our new service-disabled veterans. With the veterans procurement
legislation, a viable alternative for many is entrepreneurship or some
form of self-employment. But without some business development
assistance, this alternative will be more than difficult to achieve.
The SBA Office of Veterans Business Development (OVBD) which was
created under the legislation (PL 106-50) also created a position of an
Associate Administrator. OVBD has increased its headquarters staff size
but has been given limited resources to operate four veteran business
outreach centers and to provide assistance to veteran businessowners
with Federal contracting, though efforts have been made to educate the
veterans of the Guard and Reserves.
The OVBD is located in the headquarters building in Washington,
D.C. But it is not situated in such a way that it is easily accessible
to the public. As a matter of fact, very few people even know that the
office exits. Usually when SBA veteran's representatives participate in
a small business outreach event, they are from the SBA District Office
in that City or State.
Each District Office throughout the country has a person who is
designated as the veteran's rep. But the level of assistance they
provide varies by location and their other assigned duties. However,
under the leadership of the newly appointed Administrator, Steven
Preston and his Chief of Staff, Joel Szabat, SBA is starting to direct
some resources toward assisting veteran businessowners as evidenced by
the increase in staff for the Office of Veterans Business Development
and their open working relationship with the Veterans Entrepreneurship
Task Force, SDVOBs, and members of the Guard and Reserves.
Recently, the SBA Associate Administrator, reported increases in
the number of loans to veteran businessowners, including disaster
relief loans, as a measure of SBA's success for veterans. Yet it is
noted in a March 2007 report from Senator Kerry of the Senate Small
Business Committee, that `as the loans have gone up, they are not
proportional to the loans made to small businesses as a whole.'
There's very little information provided by SBA regarding the
success of the business relative to the amount of the loan received.
However, here recently, I have spoken to several veterans of the
National Guard, who have had difficulties after receiving loans. But
they seem to be having even more difficulty getting someone to address
their concerns.
One of the benefits of having the OVBD as part of the SBA is that
it can draw from the variety of offices already established to assist
small businessowners. And since Veteran businessowners represent the
diversity of Americans: male, female, young, old, Black, White,
Hispanic, Disadvantaged or Other; many may qualify for other small
business programs offered by the SBA.
The SBA has its cadre of Small Business Offices and small business
resource partners located throughout the U.S., i.e., the Small Business
Development Centers, SCORE, Business Information Centers, and Women
Information Centers. However, none of these resource providers are
veteran-specific. While they are accessible to veterans, they are
primarily designed to address the small business needs of the entire
community.
I believe this often leads to the lack of identity of the OVBD.
More often than not, when referring to the OVBD, people refer to the
SBA. And when you access the SBA website for services, those for
veterans are not obvious. So if services via the SBA for small
businessowners are less than adequate, then the same will probably be
said of those services for veterans.
THE CENTER FOR VETERANS ENTERPRISE (CVE)
Under Public Law 106-50, the Center for Veterans Enterprise (CVE)
was created under the Dept. of Veterans Affairs Office of Small and
Disadvantaged Business Utilization Office. CVE is located in the
District of Columbia and serves as an information resource for veterans
primarily interested in the Federal marketplace. Since its inception
over 5 years ago, CVE is the entity that is showing the most promise
and has managed to create a unique role among the 3 primary government-
assisted veterans entrepreneurial programs.
The VA will soon be the first Federal agency to implement
legislation that will prioritize the use of Service Disabled Veteran
businessowners and Veteran businessowners in Federal contracting. Under
PL 109-461, Sec 502-503 (recently passed legislation to increase
contracting opportunities for VOBs & SDVOBs within the Dept. of
Veterans Affairs) the VA will: (1) Establish Contracting Goals & Review
Mechanisms; (2) Noncompetitive, Sole Source, & Restricted Competition;
(3) Required Registration in the VIP Database--VetBiz.gov; (4)
Verification of Veteran Status & Ownership, Penalties for
Misrepresentation; (5) Survivorship--10 yrs if 100 percent disabled;
(6) Contracting Preferences & Priority; (7) Annual Reports & 3-Year
Study.
CVE is the office that has developed and manages the VIP database
that contains thousands of records of data on veteran and service-
disabled veteran owned businesses and accessible to the public,
agencies, and primes. VIP stands for Vendor Information Pages though
some refer to it as the Veterans Information Pages; because, to be
registered in the VIP database, the company must be owned and operated
by a veteran or service-disabled veteran. And soon the verification of
veteran and disability status will be mandatory.
CVE has followed the directives of the Executive Order 13-360 since
it was first initiated. They used their site to post all of the
Strategic Plans required by each agency. Though there has been some
confusion by SBA as to the annual revisions and reporting requirements
under the Execution Order, CVE continues to post the plans.
CVE has several program analysts that assist veteran businessowners
with understanding the Federal procurement process and the VA's Federal
procurement requirements and supply schedules. Though these analysts
are not clearly identified on their website, they have recently started
to provide more assistance to Agencies and Prime contractors seeking to
identify capable and qualified service disabled veteran owned
businesses.
CVE participates in a number of small business conferences, events,
and training sessions to reach out to veteran businessowners all across
the country. This will be there 3rd year of Co-sponsoring the National
Veterans Small Business Conference and Expo. And each year for the past
5 years, CVE has organized an event to pay special recognition to
veteran businessowners, agencies, and large prime contractors that have
demonstrated their support for the veterans procurement program.
As program manager of SDVBs first Federal contract for facilities
management and operations at the Veterans Administration Headquarters
Building in Washington, D.C., I shared the honor of receiving a
Distinguished Service Award in 2002 from the Center for Veterans
Enterprise for providing excellent service while creating over 40 jobs
for veterans and other people with disabilities.
The Service Disabled Veterans Business Association (SDVB), is a
non-profit, community rehabilitation program that provides employment
and entrepreneurial opportunities for service disabled veterans by
identifying procurement contracts for services in accordance with the
Javits-Wagner O'Day Act (JWOD Program) and creates partnering
arrangements with corporate and established business entities referred
to as ``Patriot Partners.''
CVE works in association with the VA's Office of Small and
Disadvantaged Business Utilization (OSDBU) under the leadership of
Scott Denniston, who has been very supportive of the VET-Force, the
VETS Group, and other organizations actively promoting the use of
veteran businessowners. By utilizing the services of the VA OSDBU and
outside resource partners, CVE greatly expands its outreach capacity.
In Summary:
The Federal marketplace is a trillion dollar industry. And 3
percent of that annual budget is easily in the billions. Not to mention
the prime vendors procurement budget and other non-federal
procurements. Both Federal agencies and commercial vendors are faced
with the time consuming task of identifying and screening capable and
qualified veteran owned small businesses to meet their requirements.
And veteran businessowners need as much help as they can to be ready.
Following the recently publicized events related to the treatment
of veterans at Walter Reed Army Medical Center, it should be abundantly
clear to all that our service members, their families, and citizens
throughout the United States are taking note of how this new generation
of service members are being treated. The actual and perceived
treatment of our Nation's Veterans, especially those returning from the
War on Terrorism, will be a symbol of how valued their sacrifice was
and a clear signal to any future enlistees on the ultimate value of
their service to the Nation.
The veteran businessowners not only need access to capital,
resources, technical assistance, and training, they need an entity that
can advocate on their behalf before our law-makers, our government
Agencies, and the White House. They need an entity that will help to
ensure that the laws are implemented once they have been passed; and an
entity that can ensure that services are provided as advertised.
As stated in the Report to the Nation, developed by members of the
VET-Force, `the presence of successful and prominent veterans within
and across our Nation's business communities is a testimony of a
grateful nation--a nation that honors and respects the sacrifices made
by Veterans in behalf of our country, both today and tomorrow. Veterans
are uniquely qualified to work as contractors to the Federal Government
because of their service experience and their dedication to providing
quality products, on time and at a reasonable cost. Effective
legislation such as PL 106-50, PL 108-183, and Executive Order 13360,
has provided a good beginning in allowing America to honor the service
of Veterans who continue to serve by helping to build a stronger
economy. More needs to be done.'
RECOMMENDATIONS:
1. TVC, OVBD, and CVE should include veteran service
organizations, community based organizations, and veteran
businessowners in the decisionmaking process regarding outreach
programs and services.
2. TVC should establish at least one state-of-the-art training
facility for veteran businessowners seeking to start or expand their
own small commercial or Federal contracting business. TVC should not be
required to build new resource centers across the country until they
have at least matching funds to operate them. And both OVBD and CVE
should make accommodations for veterans easily access program offices.
3. Congress should require a Strategic Operating Plan from any
program office for veterans that is funded by tax-payer dollars, PRIOR
to receipt of the funding. And the agency head and senior level
designated official responsible for the operation of the program should
be held accountable.
4. Since TVC is a government funded program but moving toward a
full non-profit organization, the Board of Directors should hold at
least 4 public meetings per year and not always in Washington, D.C. The
veteran's community should know the Board. And Board members should
participate in veteran business outreach events (whenever possible).
5. Members of the TVC, SBA, and CVE Executive Staffs should
participate in federal acquisition council meetings with the heads of
all Federal agencies and report their findings back to the veteran's
business community regularly.
6. As TVC is the quasi-governmental entity, they should serve as
an advocate for veteran businessowners and become more aggressive in
alleviating barriers to Federal contracting opportunities for veteran
businessowners.
7. Neither TVC, SBA-OVBD, or CVE should continue to receive
millions of taxpayer dollars to implement programs that do not support
the primary goals and objectives of the majority of the veteran's
business community. There has to be more accountability and penalties
for waste, abuse, and of course fraud.
8. Clarify the ``Rule of Two.'' The Rule of Two as introduced
under PL 108-183 is contained in Part 19 FAR, and the Code of Federal
Regulations (CFR) 13 CFR, Part 125. The Rule of Two states if a
contracting officer knows of two or more SDVOBs that can do the work,
then the requirement must be competed. But if only one SDVOB is
available to do the work, then a sole source award can be made.
9. Create a level playing field for veteran businessowners as
with the 8a and HUB Zone programs. The use of ``May'' for SDVOBs should
be changed to ``Shall'' as with 8a and HUB Zone owners. The order of
priority for contracting preferences among the three groups should be
equal.
10. Strengthen the SDVOB program by increasing contract awards,
resources, and support without including SDVOBs into an inefficient 8a
program. The 8a program was created to help alleviate the more than 100
years of wrongful discrimination and exclusion of minorities from the
full benefits of American society, including the Federal marketplace.
The SDVOB program is intended to be inclusive of any American who
served in this country's armed forces, guard or reserves. The SDVOB
program should retain its own identify for ``those who have borne the
battle.''
11. Congress should consider appropriating funds in the form of
grants to be directly awarded to community-based organizations that
provide supportive services and programs for veterans seeking to become
entrepreneurs. TVC could be designated as the administrator of those
funds.
12. Congress should also consider adapting a program for service-
disabled veterans that would be modeled after the JWOD program. Under
the JWOD program, federal agencies are required to make every effort to
procure their goods and services from small businesses that have agreed
to hire at least 60 percent of their labor force from people with
severe disabilities. This could prove to be a win-win for the
government, service disabled veteran owned businesses, and seriously
disabled veterans.
13. TVC, OVBD, and CVE should establish partnership agreements to
share small business resources and information to improve the outreach
efforts to target veteran businessowners and to increase the pool of
capable and qualified veteran businessowners around the country.
Thank you for your attention to these matters. This concludes my
statement.
Prepared Statement of Joseph C. Sharpe, Jr., Deputy Director, Economic
Commission, American Legion
The American Legion appreciates this opportunity to comment on the
current state of veteran entrepreneurship and self employment, to
include obstacles faced by aspiring entrepreneurs, programs being
relied upon by entrepreneurs and to review current programs funded by
the Federal Government that assist veterans.
The American Legion views small business as the backbone of the
American economy. It is the mobilizing force behind America's past
economic growth and will continue to be the major factor as we move
well into the 21st Century. Presently, more than nine out of every ten
businesses are small firms, which produce approximately half of the
Gross National Product. Currently, over one-half of the nation's work
force is employed by small business, with the average company employing
approximately 11 persons.
America has also benefited immeasurably from the service of its 24
million living veterans, who made great sacrifices in the defense of
freedom, in the preservation of democracy, and in the protection of the
free enterprise system. According to the Small Business
Administration's (SBA) Office of Veterans Business Development in
Washington, DC, the number of small-business-owning veterans has
increased to more than four million nationwide with more than 235,000
being service-connected disabled veteran owned. They range from home-
based sole proprietorships to high--tech global corporations.
In addition, due to the experience veterans gain in the military,
the success rate of veteran owned businesses is higher than other non-
veteran owned businesses. The current War on Terror has had a
devastating impact on the military and has contributed to exacerbating
this country's veteran unemployment problem, especially within the
National Guard and Reserve components of our military. The present
unemployment rate for recently discharged veterans is double the
national average. Unfortunately, many of the thousands of service
members who are currently leaving the service are from the combat arms
and non-skilled professions that are not readily transferable to the
civilian labor market.
One way of combating unemployment is through the creation of new
jobs. Small business creates by some estimates 60 percent to 80 percent
of net new jobs, therefore providing a central element for strong
economic growth. government should assist in the creation of new jobs
by encouraging qualified entrepreneurs to start and expand their small
businesses. No group is better qualified or deserving of this type of
assistance than the veterans of this nation.
Increasingly, the growth and stability of this nation's economy is
dependent on the long-term success of the small business networks
across the country. However, during a time of war there is much to be
accomplished. Ironically, for too many years, the very men and women
who served in uniform and who stood ready to fight, and if necessary to
die, in order to protect and preserve our free enterprise system, were
completely ignored by the Federal agency responsible for meeting their
small business needs. Therefore, The American Legion welcomes the
recently passed amendment 216 that seeks to increase the SBA's budget
by $78 million, to $671 million and Veterans Outreach Program by $1.5
million. Funding levels have a crucial impact on the scope and quality
of programs and services delivered by SBA to veteran-entrepreneurs,
effecting possible success or failure of some veteran owned businesses.
Reaffirm Support of the Small Business Administration's Office of
Veteran's Business
The American Legion supports increased funding of the Small
Business Administration's Office of Veterans' Business Development in
its initiatives to provide enhanced outreach and specific community
based assistance to veterans and self employed members of the Reserves
and National Guard. The American Legion also supports legislation that
would permit the Office of Veterans' Business Development to enter into
contracts, grants, and cooperative agreements to further its outreach
goals and develop a nationwide community-based service delivery system
specifically for veterans and members of reserve components of the
United States military. For FY 2008 estimated funding for this office
would be estimated to be $5 million, in FY 2009 $10 million, and FY
2010 15 million to enable it to implement a nationwide community-based
assistance program to veterans and self employed members of the
Reserves and National Guard.
The National Veterans Business Development Corporation:
Congress enacted the Veterans Entrepreneurship and Small Business
Development Act of 1999 (P.L. 106-50) to assist veteran and service-
connected disabled veteran owned businesses by creating the National
Veterans Business Development Corporation and with the assistance of
the SBA. The Veterans Corporation (TVC) created a Veterans
Entrepreneurial Training (VET) Program to promote and foster successful
veteran entrepreneurship within the veteran business community, but
this program no longer operates. Currently, the organization's main
efforts have been to provide distance-learning education in how to
start and expand existing businesses, to include training in finance,
accounting and contracting. The Veterans Corporation indicates it has
established a foundation for a 10-year plan to reach all four-five
million veterans interested in entrepreneurship. Its latest vision is
to assist Guard / Reserve and transitioning members of the Armed Forces
and their families with the establishment of their own businesses. The
American Legion is working with the Veterans Corporation to ensure the
best method or methods of assisting these deserving veterans. TVC has
in the past stressed creating online education programs hosted by other
third party organizations to assist veterans with obtaining basic
literacy skills. This current plan would create an online platform to
match veterans with entrepreneurial education and career opportunities
and to provide grants to Small Business Development Centers around the
country and other business development organizations to specifically
assist veterans.
On Line Development Programs
The current staff of the Veterans Corporation has focused on
employing the use of the worldwide web to reach veterans. According to
TVC representatives a combination of services, online and distance
learning will serve the largest number of veterans needing
entrepreneurial services in all fifty states. TVC expects to launch a
Virtual Veterans Business Center in cooperation with SBA's Service
Corps of Retired Executives (SCORE) to provide a nation-wide, market
specific, person-to-person counseling service to veterans not only in
America, but deployed overseas as well.
TVC has also launched a Virtual Business Incubator with the
specific aim of helping National Guard and Reservists who own
businesses and are currently deployed in Afghanistan, Iraq or any place
else in the world. ``Deploy Proof Your Business '' is another online
program specifically designed to assist members of the National Guard
and Reserve components in protecting their businesses prior to
deployment.
The American Legion fully supports these progressive programs aimed
at the technologically astute veteran.
Small Business Development Centers
The Small Business Development Centers (SBDC) are already funded
almost $90 million a year by SBA and our understanding is their written
agreements with SBA provide direction for their specific creation or
operation of veteran, service-connected disabled veteran and reserve
component Member entrepreneurial assistance. Why does the SBDC need an
additional, third party organization such as the Veterans Corporation
to provide them additional funds from Congress to perform what they are
already funded to deliver by SBA? If SBDCs require additional resources
to enhance, improve, develop or deliver specialized assistance to
veterans and reservists that funding process should be through their
normal funding channel of the SBA. Additionally, should Congress choose
to provide additional resources to SBA to enhance SBDC programs
specifically for veterans and reserve component service members, the
Office of Veterans Business Development should be part of the program
design, selection and oversight process to ensure that the expertise of
veterans, including the policy and program delivery and reporting
requirements, are designed and developed by the SBA office whose
responsibility by law is veterans' business development.
Public Law 106-50
The American Legion acknowledges that the requirements of Public
Law 106-50 as originally envisioned are not being met by TVC at the
present time due to the scope of the mission and funding requirements.
The American Legion agrees with the view that forcing TVC to duplicate
or replicate preexisting services such as those provided by the Small
Business Development Centers (SBDC), Procurement Technical Assistance
Centers and Department of Labor One Stop Centers does not prudently use
taxpayer funds or the limited dollars given to TVC.
Therefore, The American Legion recommends that the resource-
training centers (St. Louis, MO; Flint, MI; and Boston, MA) that TVC is
currently providing funding for be given to the jurisdiction of the SBA
veteran's development office.
The SBA's veterans development office is presently funding five
such centers around the country and should be given the additional
three. In addition, the SBA office should take on theresponsibility of
partnering with military and Veterans Affairs hospitals, Transition
Assistance Programs (TAP), State Departments of Veterans Affairs,
Procurement Technical Assistance Centers, Military Family Support
Centers, and Veterans Service Organizations to provide employment and
entrepreneurship programs along with the addition of funding and
necessary senior staff to oversee the implementation and development of
such a program. TVC would operate more effectively acting as a liaison
with existing associations of small businessowners and, by working with
SBA programs, ensure the involvement of private and successful military
alumni from the business community to help support SBA's successful
(re) integration ofveteran and reserve component entrepreneurs into the
private and public American marketplace.
SBA Special Veterans Small Business Loan Program
Many veterans who want to become entrepreneurs either do not
qualify for the direct or guaranteed loan through the SBA or do not
apply for such a loan because of the red tape involved in obtaining an
SBA loan. In 1973, VA's small business lending authority was rescinded
by Congress for lack of use and Congress passed legislation in the
early eighties that amended Chapter 37 of Title 38, United States Code,
to establish a pilot Veterans' Small Business Loan Program that was to
be administered by the Department of Veterans Affairs (VA). The VA's
Small Business Loan Program was never funded; however, the SBA did
implement a direct Vietnam-Era Veteran and special disability loan
program that was delivered to veterans and disabled veterans until
1995. P.L. 106-50 required GAO to examine if VA should create a small
business loan program for veterans, and GAO determined in 2000 that VA
should not create a business loan for veterans but that perhaps SBA
should with VA involvement. With the current number of active duty
service members leaving military service SBA research finds that 22.1
percent of veterans are purchasing, starting, or considering a startup
or acquisitions of a business. Access to capital is the number one
issue of concern for these veterans followed closely by the lack of
knowledge of or access to veteran's business development programs.
These findings lead us to the recommendation that SBA:
Create a Special Small Business Administration (SSBA) 7a Vet
Express Loan Program targeted to and aggressively marketed to veteran
and reserve component service members:
This loan would:
Provide for maximum loan amount of $750,000
Identify means to reduce fees
Provide full 75 percent-85 percent guaranty
SBA provide counseling, training mentoring / Technical
Assistance as required or requested
Priority Loan processing by Lenders and SBA
Add Sec 7, 15 USC 636 (if called provisions) for reserve
component members
In addition, a new program would also assist Reserve and National
Guard entrepreneurs who are mobilized for active duty service by
cushioning the impact of activation on their business. A report (to the
Committees on Armed Services of the Senate and the House of
Representatives) on the effects of activation in support of Operations
Desert Shield and Desert Storm on members of the National Guard and
Reserves who were self employed or owners of smallbusinesses indicated
that a sizable percentage of activated reservists may be expected to
experience economic losses and that an ever greater percentage actually
experienced losses during the Persian Gulf Conflict. Another report's
findings, the May 2004 status of forces survey of reserve component
members tabulations of responses (Defense manpower data center),
included:
The primary consequence of a reservist being activated
was lost business.
Replacement was only partially effective. When the
reservist was replaced, the company incurred additional costs
associated with its search, hiring, and training. But even companies
that were able to replace the reservist experienced a loss of business
from the activation.
For many small businesses, loss of a key employee to
active duty is virtually a catastrophic event. This was true whether
the employee was a skilled professional or an experienced blue-collar
worker.
Presently, SBA offers a program billed as Military Reservist
Economic Impact Disaster Loans. For companies that meet certain
eligibility criteria, these loans help offset the economic consequences
of the loss of their reservist personnel. To qualify, a company must be
able to show that the activated reservist is critical to the success of
the company. The extent of losses must be documented with financial
data and the company must provide certain supporting information.
Reservists Economic Injury Disaster Loan
Enhance the SBA Military Reservists Economic Injury Disaster Loan
(MREIDL) Program specifically for reserve component members who are
entrepreneurs / small businessowners:
Offer MREIDL as a pre-mobilization and post-mobilization
loan (now available only after mobilization orders are received).
SBA provides mandatory Technical Assistance through
existing SBA providers as part of loan application package prior to,
during and following return from mobilization.
Ensure availability of additional credit or capital to
small businesses owned by activated and de-activated reserve component
members, based on pre-mobilization profitability of business with
approved plans.
SBA provide prioritized loan application, approval and
disbursement processes.
Explore equity / guarantee / fee / insurance subsidy with
DOD and other partners.
Deferral of repayment of direct loans until 1 year after
release from active duty.
SBA would administer the new loan due to its expertise, experienced
staff, and business loan guarantee program administrative
infrastructure. VA and DOD could be part of this program. They have the
ability to provide facilities for entrepreneurial training; BRAC bases
could be used for small business incubators; VA and DOD could provide
lists of small business concerns owned by veterans and reservists; and
DOD could provide prioritized contracting opportunities to service-
disabled veteran, veteran and reservist owned small businesses focused
on producing the goods and services that are procured by the U.S.
Government necessary to fight and win the Long War.
The American Legion believes that programs listed above are
necessary in order to develop and retain the critical skills contained
in reserve component service members, especially those service members
who have been or will be activated for the Long War, and thereby help
to retain and recruit reserve components service members with the
professional skills which are critical to the reserve missions as part
of the Total Force.
The American Legion seeks and supports legislation that would
reauthorize and fund a SBA Small Business Loan Program specifically for
service-disabled and reservist small businessowners and prospective
entrepreneurs.
In Conclusion
The American Legion's National Economics Commission mission is to
take actions that affect the economic well-being of veterans, including
issues relating to veterans' employment, home loans, vocational
rehabilitation, homelessness and small business. The American Legion
realizes that organizations, like the National Business Development
Corporation were created through P.L. 106-50 to provide America's
veterans with superior entrepreneurial training and business resources
that allows them to start or grow a business; and in turn, contribute
to the economic well-being of the nation. However, The American Legion
would like to reiterate that TVC has not fulfilled the mandates of P.L.
106-50 (creating new resources centers, adequately funding the three
that they have and creating a board to oversee licensing and
certification issues) and is actively moving away from those mandates
of P.L. 106-50 by focusing its efforts and funding on online
entrepreneurial programs that they believe would maximize their
available resources and reach more returning veterans. Therefore, The
American Legion believes the Small Business Administration's office of
Veterans' Business Development should be the lead agency to ensure that
veterans returning from Iraq and Afghanistan are provided with
Entrepreneurial Development Assistance.
Comprehensive training should be handled by the SBA and augmented
by TVC's online training. Resource Training Centers should include DOD
and VA faculties. Currently, many military families are suffering
financial hardship while their loved ones are recuperating in military
hospitals around the country. Many spouses leave their jobs to be with
that disabled service Member only to watch their finances deteriorate.
Seamless transition in many cases is just a wishful thought; however,
if business development training was offered to military members, a
small home based business that is flexible could be the answer in
guaranteeing a constant source of revenue for the family, in turn
making them less dependent on the Federal Government.
The American Legion strongly supports the mandates of P.L. 106-50
that were designed to assist all veterans wishing to start, expand or
protect their business. If there is a true desire to assist veterans
returning from Iraq and Afghanistan in developing small businesses we
must work together to enforce the mandates of P.L. 106-50.
Thank you, Mr. Chairman, for allowing The American Legion to
provide written comments on this very important issue.
Prepared Statement of Richard F. Weidman, Executive Director for Policy
and Government Affairs, Vietnam Veterans of America
Madame Chairwoman, Ranking Member Boozman, and distinguished
members of this Committee, thank you for the opportunity for Vietnam
Veterans of America (VVA) to present our views here today regarding
veterans' entrepreneurship and small business development. VVA
appreciates the bi-partisan leadership this Subcommittee continues to
show on this important set of issues. VVA also appreciates the tenacity
and positive tone that you have been able to set and maintain in the
face of the continued passive aggressive behavior toward veteran owned
and service disabled veteran owned businesses and self employment of
veterans on the part of so many in the Executive branch. We truly
admire that you have not only kept a positive perspective, but that you
persevere on our behalf.
The overall view of efforts to assist veterans, particularly
disabled veterans, to start and successfully operate their own small
business is a decidedly mixed picture. Certainly those of us who have
been at this for decades thought that we would have much more in the
way of substantive services in place for the young men and women
returning home form military service today than currently exists.
It has been almost eight (8) years since the passage of Public Law
106-50 ``Veterans Business Act 1999'' which gave a goal of 3 percent of
ALL business done by ALL agencies of the Federal Government to go to
Service Disabled Veteran Owned Businesses (SDVOB), and which among
other things set up of The National Veterans Business Development
Corporation which is now generally known as The Veterans Corporation
(TVC). Yet at this time both the agencies and the TVC have yet to meet
their goals.
Without men and women ready, willing and able to serve in the Army,
Navy, Marine Corps, Air Force or Coast Guard the Department of Defense
(DOD) would not be in existence. Without those willing to serve to
defend our Constitution against all enemies foreign and domestic, and
place their life and limb on the line in order to do so, we as a nation
would be in dire straights. More importantly, our Nation would be
vulnerable to the many enemies of our democracy and the western way of
life.
When men and women separate from the Armed Forces, and thus become
veterans, not all will need additional medical services nor educational
benefits nor other important services, at least not immediately. They
will each need a job, or a way to be gainfully employed. For some that
will mean that they will work for a private company or a government
agency. For some, particularly disabled veterans, self-employment may
well be the best option unless they can secure ``niche'' employment.
As to how the various elements that are supposed to be assisting
veterans, by far the most useful to the most veterans is the Center for
Veterans Enterprise (CVE) at the United States Department of Veterans
Affairs (VA). The CVE has counseling and referral services that are
generally very useful to most veterans, and the Veterans' Information
Pages (V.I.P.) that are maintained by the CVE staff. Furthermore, the
Center for Veterans Enterprise, after some initial problems getting off
of the ground, seems to be not only effective in conceiving and
building practical programs like the ``VET-FRAN'' program that creates
business options available to veterans on favorable terms, but appears
to be striving to learn how to do a better job in each of its aspects,
on an on-going basis. The CVE recently initiated a contract with an
outside vendor to do nationwide focus groups to learn more about the
problems that are operated by the VA and by CVE directly. While we know
that the final ``de-briefing'' on this work and report has been
delivered to CVE, we do not know the results. Hopefully some of this
data will be shared with you today.
The real point about CVE is that they are doing a good job, and
trying to do a better job. Part of the reason that they are able to do
this is the unwavering strong support of the Secretary of Veterans
Affairs, R. James Nicholson, and Deputy Secretary of Veterans Affairs
Gordon Mansfield.
The Veterans Entrepreneurship Task Force or VET-Force is
cosponsoring a ``Veterans' Accountability Conference'' with the CVE on
June 14, 2007, at the Grand Hyatt Hotel in Washington, D.C. As you
know, June 14 is not only the birthday of the United States army, but
is also observed as Flag Day. Among other activities that day will be a
Awards Luncheon with Secretary of Veterans Affairs as the featured
speaker, delivery of the ``Report Card'' on how well Federal Agencies
have performed (or not performed) in regard to the long standing
requirement to ensure that a minimum of 3 percent of all contracts and
3 percent of all sub-contracts go to Service Disabled Veteran
businessowners, workshops on key business skills, and we will end the
day with a VET-Force planning meeting, which will be open to all
participants and the public. Staff from both personal offices as well
as Committee staff has been invited to participate without charge, and
we hope that your staff can join us for at least part of the day, even
though it is likely that your busy mid-week schedules will preclude any
of the members being able to attend.
It is worth noting that VA is till struggling to change the
corporate culture when it comes to procurement, particularly in
construction and in acquisition of goods and services by the Veterans
Health Administration. As you know, the regulations are still pending
that will implement the provisions of Public Law 109-461 giving VA
additional tools in order to increase the number and dollar amounts of
contracts and sub-contracts that go to Veteran Owned Businesses (VOB)
and Service Disabled Veteran Owned Businesses (SDVOSB). While it is our
hope that this will help enormously, and we thank you for your strong
leadership in promulgating this statute.
It is worth noting that the VA, on the orders of Deputy Secretary
Mansfield and with the whole hearted support of Secretary Nicholson the
VA has put achievement of the 3 percent goal in procurement into the
performance evaluations of key managers. This has helped a great deal
in focusing attention on this issue. VET-Force contends that every
department and agency needs to emulate this strong leadership, and do
the same thing with their key managers at each Federal agency. We are
having serious discussions now with the Department of Defense in regard
to doing a similar move.
One troubling development that seems to be cropping up at VA
however is that some contract managers appear to be rushing contracts,
particularly multi-year contracts, toward consummation prior to the new
regulations taking effect next month, in order to circumvent the new
regulations and to avoid having to contract with qualified SDVOSB and
VOB. We are frankly not sure how widespread this phenomena is (and we
hope it is only the few incidents we have documented), but have asked
VA to investigate. If this is in fact happening, it is our view that
those involved should be appropriately sanctioned, in addition to VA
stopping these improper actions.
Additionally, VVA would certainly like to see much more overt and
concerted activity on the part of the VA Vocational Rehabilitation
sections across the country in regard to assisting veterans who wish to
become self-employed or start a small business, particularly those with
significant disabilities.
In sum, one has to give the VA high marks for virtually all aspects
of their activity for veteran owned business and service disabled
veteran owned businesses.
SBA
The Veterans Business Development Office of the Small Business
Administration (SBA) is more problematic. While since the arrival of
new Administrator Steve Preston at the SBA last September the SBA as a
whole has become much more responsive. It certainly appears that both
Administrator Steve Preston and Chief of Staff Joel Szabat are engaged
and committed to making SBA much more veteran friendly, but it would
appear that it is more than a bit of an uphill struggle. I must say
that they are both open to reasonable communication, and have been
extraordinary in reaching out to the veterans' business community,
particularly to VET-Force participants.
For the first time in recent memory, top SBA officials spoke about
our common duty as Americans to assist veterans, and especially service
disabled veterans, who are in business or attempting to start their own
business during Small Business Week early this month. While there still
are very few awards or no awards for VOB or SDVOSB categories in
comparison to other groups, particularly in regard to contracting and
subcontracting, their efforts were clearly visible and I believe
genuine. Only time will tell whether they are able to follow this up
with concrete action.
The addition of a person in the Veterans Business Development
office who does contracts full time is a significant addition, and it
has been an aid to some businesses. It is still, however, far short of
the efforts extended by SBA for other categories of small businesses
such as 8(a) and women owned businesses.
As to what steps can be considered useful steps and concrete
actions that can be taken by the SBA, those include the following
steps:
1. Create a dedicated section in the contracts office with at
least the same number of contract specialists devoted to eight
(a) contracting. (It is worthy noting that there are 12,700
service disabled veteran owned businesses listed on the VIP at
VA, while there are less than 7,400 certified 8(a) businesses.
Since there are many more SDVOSB than 8(a), having the same
number of contract specialists does not seem to be too much to
ask.)
2. The Administrator should take steps to create a capital
formation program specifically for VOB, with an emphasis on
SDVOSB. This should not be just for ``start up capital'' but
also for so-called ``mezzanine funding'' to help businesses
expand to a sustainable phase beyond the first few years of the
small start phase.
3. As noted below, the $25 million dollars that The Veterans'
Corporation people have been running all over Capitol Hill
seeking should be added to the budget of the Veterans Business
Development Office for use primarily as grants to localities to
operate projects and expand existing services to better reach
veteran entrepreneurs and would-be entrepreneurs. These grants
should go to expand services of particularly effective Small
Business Development Centers, to ensure that there is continued
funding for such efforts as the fine project in St. Louis
operated by Pat Heavey, and for special projects reaching out
to wounded service members or to veterans for purposes of
helping them become self-employed or to start micro businesses.
4. The Administrator should issue a long overdue
Administrator's Order implementing all of the statues that have
been enacted in the past 8 years, plus putting more teeth into
Executive Order 13-360 in regard to services delivered by SBA
or funded through SBA.
5. The Administrator should undertake a review of all SBA
programs to ensure that veterans, particularly disabled
veterans, are receiving full and proper access and maximum
services from each of the SBA services and programs for which
those individuals would otherwise be eligible. In other words,
for example, this internal review, and appropriate corrective
action as needed, would determine if women veterans were being
properly reached in numbers commensurate with their incidence
in the population and given the full range of services
available to the maximum extent legally permitted.
6. The Administrator should specifically review all that is
being done for those citizens serving in the National Guard or
Reserves who activated, and determine what more can be done
under existing law to better assist these individuals, and work
with the Congress and The White House to determine what else
can and should be done by changing the law or by Executive
Order.
7. Closely related to the above point, but slightly different,
is that we as a nation have to figure out how we can better
support those businesses who have National Guard and Reserves
members as employees who are now subject to frequent
deployments for longer periods of time. This is a matter of
national defense, but it is also a veterans re-employment and
employment issue because the negative side of hiring and
employing those who serve in the National Guard and Reserves is
being disproportionately borne by a relatively small segment of
the employer community. It is also having a negative impact on
veterans' employment and on the advancement of those who are
employed within their company. This is the real world, where
the bottom line must be addressed, and not the ideal world of
what is fair, so we must find practical ways to solve this
problem.
8. The Associate Administrator for Veterans Business
Development and all other officials of the SBA (and other
agencies for that matter) should by this point know better than
to keep saying in public and in private that ``there are not
enough service disabled veterans to do the 3 percent
contracting, they are not sophisticated enough to do the work,
and we have to teach these poor old veterans how to compete''
before we can move forward on contracting and sub-contracting
goals, or with other programs that would better enable veterans
to have access to capital or international markets. Frankly,
none of this is true, and these negative stereotype ``straw
men'' set up by those who continue to say these things are a
manifestation of ``VETism'' or an ugly set of prejudices and
stereotypes that is every bit as ugly and inappropriate as
sexism or racism.
While there are many more specifics that I could list here, suffice
it to say that there is much that can and should be done by and at the
SBA, but VVA has confidence in the top leadership of SBA in regard to
doing right by America's veterans for the first time in a very long
period of time. I personally have more confidence in Administrator
Steve Preston than any Administrator since James Sanders departed, and
that was in 1985. I pledge that both VVA and on behalf of the VET-Force
to work cooperatively with him and his management team to accomplish
much in the next two years. However, time will tell. We shall keep you
posted of any and all progress.
The National Veterans Business Development Corporation
The National Veterans Business Development Corporation more
commonly known as The Veterans Corporation or TVC, was set up by the
same PL 106-50 and formed in 2000. Frankly, the actual mess that we
have today, and for much of the existence of TVC, is so far a field
from what some of us hoped would be a vehicle for positive changes,
that I feel like one of a team of surgeons known as Drs. Frankenstein.
The bottom line is that what started out as a noble experiment has
been an utter failure, and TVC should be either radically changed in
regard to governance, or just eliminated from wasting any more taxpayer
dollars or the efforts of any more good people in the veterans'
community on this debacle.
Since that time TVC has gone through numerous management changes
and Board upheavals. AT one point, under the current President, they
fired all of the veterans on staff, including at least two who were
special disabled veterans in favor of hiring non-veterans. Under the
current Board composition and management they have not only not raised
any appreciable outside funding, as required by the law, but have been
saying that they do not think this is the direction they wish to take!
In the past year or so, the officers and the staff of TVC, which is
virtually 100 percent funded with Federal dollars, have been running
all over Capitol Hill seeking legislation that would relieve them of
the mandate to raise private funds, and seeking more Federal dollars.
Frankly, the last time VVA looked, spending Federal dollars to brazenly
seek more Federal dollars and pay lobbying staff is just plain illegal,
not to mention just a wrong thing to do.
The only section of their mission that has been accomplished is
partially funding two ``Veterans Business Resource Centers'' that were
not started by the TVC and to which TVC has no appreciable expertise to
contribute. The funding for these two projects should come from the
Veterans Business Development Office at SBA, and eliminate the needless
overhead and the six figure salaries of the TVC.
I will not waste the time of this distinguished panel by reviewing
their ``accomplishments'' because we believe there frankly are no
accomplishments. There is nothing that is ``value added'' here that
cannot be accomplished by the SBA and the CVE at VA. Let us please stop
this charade, give the TVC $250,000 in funds to either close it down or
to find private resources to continue, but let us invest the hard
earned cash of $ 25 Million in taxpayer dollars in something that will
yield a return on investment, and that is certainly not at The Veterans
Corporation.
Madame Chairwoman, thank you again for the opportunity to appear
here today to share our views. I would be pleased to answer any
questions you or your distinguished colleagues may have.
Prepared Statement of Walter G. Blackwell, President / Chief Executive
Officer, National Veterans Business Development Corporation,
The Veterans Corporation
Chairwoman Herseth Sandlin, Ranking Member Boozman, and
distinguished members of the Subcommittee, good afternoon and I thank
you for giving me the opportunity to testify before you today. My name
is Walter G. Blackwell; I am the President and CEO of The Veterans
Corporation and a Navy Veteran.
Today you have asked us to present our views on Veterans
Entrepreneurship and Self Employment. As the only Federally chartered
501 (c) (3) whose mission is to help Veterans start or grow their own
business, we would like to share with you today what we view as the
biggest obstacles that Veteran entrepreneurs face and what programs we
have created to enable Veterans, Service-Disabled Veterans, members of
the Guard and Reserve as well as their family members to start, stay
and succeed in business.
The Veterans Corporation is positioned to assist all of our
nation's Veterans. The business needs of Veterans returning from the
current conflict are really no different from the needs of Veteran
entrepreneurs from past conflicts; however, it is clear that this
generation of Veterans is more technologically savvy than even those
who returned from Desert Storm in 1991. They have the opportunity to
decide how they want to spend the rest of their lives, and roughly 15
percent of these Veterans--maybe more--will decide they want to become
Entrepreneurs. These Veterans have seen the world. They know about hard
work and grueling hours. They are returning home to be with their
families and start their own businesses to support themselves and their
communities.
Since 2001, more than 1.4 million American service members have
served in the wars in Iraq and Afghanistan. Approximately 410,000 of
these troops were National Guardsmen and Reservists. As of April 5,
2007, about 26,000 troops were serving in Afghanistan and 154,000
troops were serving in Iraq. The force currently in Iraq or deploying
in the next few months represents half of the Army's combat brigades.
At least 420,000 troops have deployed more than once, including
170,000 Army soldiers, 169,000 Marines, and 84,000 National Guardsmen
and Reservists. As many as nine National Guard combat brigades will be
sent on their second combat tour this year. More than 600,000 Iraq and
Afghanistan Veterans have left the military and are now eligible for VA
care.
These Veterans, like Veteran entrepreneurs from all generations,
have three critical business needs:
Access to Capital
Bonding
Education through coursework, mentoring and counseling
In response, TVC has developed comprehensive programs; face-to-
face, by telephone or online, to directly address and fulfill those
needs in Veteran entrepreneurs nationwide. Many of these programs are
the result of valuable partnerships with private sector organizations.
Madam Chairwoman, TVC's status as a 501(c) (3) organization has allowed
us to form important public / private partnership relationships, which
provide significant assistance to our Veterans.
These overarching programs coupled with traditional face-to-face
mentoring and counseling delivered directly through TVC's staff and
three Hub locations in St. Louis, Missouri, Flint, Michigan and Boston,
Massachusetts form a strong base in supporting our Veterans whether
they are in rural or urban environments and even if they are a current
businessowner and are serving overseas in Iraq or Afghanistan.
Access to Capital
From startup businesses to established businesses looking to
expand, The Veterans Corporation understands that financing is an
essential need for any businessowner. In fact, it is the number one
question we receive from our members. To address the issue, TVC and the
National Economic Opportunity Fund (NEOF) have created a public /
private partnership that provides access to capital for Veterans and
Service Disabled Veterans beyond the funding capability of the Small
Business Administration.
The core of TVC's Access to Capital program is building and
maintaining a set of relationships with lenders such as ACCION USA and
other lending institutions. The spirit of the program is borrowed from
the military: NEOF has pledged to ``leave no Veteran entrepreneur
behind.'' The theory is simple, when someone asks for help, you help
them, whether its reviewing their business plan, talking to a bank for
them, or just giving them friendly advice, guidance and encouragement.
The most important thing, though, is not to give up on anyone.
Let me give you a couple of examples of two Service-Disabled
Veterans currently taking advantage of the Access to Capital Program:
David Barker is an Army Reservist currently in San Diego, CA, where
he is recovering from injuries sustained while fighting in Iraq on June
11, 2005. His goal, when he leaves the military, is to return to his
hometown and run a custom paint operation. David's hometown of El Paso,
Illinois, located more than 2 hours from Chicago, is the quintessential
American small town and the place where David plans to run his own
business. After a few conversations between TVC and David, it was clear
he needed capital in order to make his business dreams come true, so
Jim Mingey headed out to El Paso to help. Rather than provide the
impersonal service that has become too common in business nowadays, Jim
wanted to meet Mr. Barker first hand in order to provide the best
service possible. Jim met with David and his family to discuss his
business plan and financial needs. David estimated that he needs
approximately $40,000 for the building and $225,000 for 2 years of
salaries and expenses. Jim walked the family through the steps to
securing a loan, and David expects to be back in El Paso early this
summer to achieve his goal and start his own business. TVC and NEOF
will continue to assist David and his family over the next few years as
his business needs evolve.
Dawn Halfaker is a 2001 West Point graduate and an all-American
basketball player and soldier. In Iraq, on June 19, 2004, a rocket-
propelled grenade was shot into the armored Humvee carrying Dawn,
leaving her badly wounded and causing her to lose her right arm.
Following recovery from her wounds, Dawn set up Halfaker and
Associates, LLC. Her company focuses on mission support for the War on
Terrorism in the areas of Homeland Security, Emergency Management,
Physical Security, Force Protection / Anti-Terrorism, Intelligence and
Border Security. Dawn's strong background has been a tremendous asset
to her business, but she needed financial assistance and strategic
financial advice. Through TVC, Dawn began working with Jim Mingey, who
is providing her with the financial insight and counseling she needs.
TVC will continue to support and mentor this Veteran and her business.
Access to Bonding
If you are a Veteran contractor or subcontractor seeking to do
business with the state or Federal Government, the ability to obtain a
surety bond is essential.
In partnership with the Surety and Fidelity Association of America
(SFAA), TVC has a fifty state program where Veterans can participate in
a bonding education curriculum and a three step fully mentored process
to secure the bonding they need on government contracts. Bonding is
especially critical to those Service-Disabled Veteran Entrepreneurs who
wish to contract with the Federal Government, and, if the 3 percent
goal mandated by the President's Executive Order is to be achieved,
this program must support as many eligible Veterans as possible.
John McGreevy, the President and Owner of Freeport Technologies in
Herndon, Virginia, is one example of a Service-Disabled Veteran owned
company that TVC is working with to obtain the bonding critical to
ensuring his business flourishes.
Freeport Technologies specializes in audio / visual installation in
conference and situation rooms located throughout different government
agency buildings. Recently, Freeport Technologies secured a number of
government contracts and are looking to be pre-approved for $2 million
in surety bonding to do the work. Through TVC's partnership with SFAA,
John McGreevy is working with local surety bond producer John Hughes of
Construction Bonds Inc. in Dunn Loring, Virginia and is now beginning
to understand the bonding process and what it takes to be bonded for $2
million. We're happy to report that John Hughes has successfully
prepared Freeport Technologies to be eligible for a smaller bond worth
$800,000 needed for a GSA contract.
TVC's Hub--St. Louis, Flint and Boston
For Veterans who prefer a face-to-face learning experience, TVC
staff and its sites in Boston, Massachusetts, St. Louis, Missouri and
Flint, Michigan offer, counseling, seminars, workshops and multi-week
programs to assist in starting or growing your small business.
An example of the work our hubs do is found below in a story of
Harrison, Michigan residents Billy and Terry Brown:
When VetBizCentral (our Flint, Michigan CBO) called Terry, she
fought back tears when she answered the phone. The normally upbeat
resident of Harrison, Michigan feels as if the world sits on her
shoulders as she tries to keep her family business, Timberlane
Cleaners, operating. Her son, Billy, deployed to Iraq last July with
the 144th M.P. unit from Owosso, Michigan. Billy was the key employee
at the family owned business, and his absence has left a huge void. To
make things worse, Terry's husband, Russell, suffered a stroke, and
there have been multiple equipment failures at the family owned
Laundromat and dry cleaner. ``Billy was vital to the business,'' Terry
said to Ed Ronders, the director of TVC's CBO. ``He's due to come home
on leave this summer, but I don't know if we can make it,'' she said,
fighting back the tears. ``I've contacted Senator Levin's office and
Senator Debbie Stabenow's office. We need help.'' TVC is working hard
to provide the help that Terry and Billy need to keep their business up
and running. Terry has just started working with VetBizCentral and is
researching the possibility of an SBA Military Reservist Economic
Injury Disaster Loan along with other bridge loan possibilities.
TVC is happy to announce that in addition to the annual operational
financial support we provide to each of our three Hubs in the form of
non-competitive grants and the 200 scholarships to Boots2Business for
their local use, TVC will be providing a special grant of $10,000 to
the St. Louis Hub to support the administrative costs associated with
their new program ``Boot Strap''. The first session will be conducted
in June of this year and will educate 20 Veterans interested in
starting a business. Each Veteran will be required to participate in
the Kauffman entrepreneurial education program and prepare a business
case. At the completion of the Boot Strap program, 15 company programs
will each receive $5,000 in business startup funding. Funding for these
startup grants is through St. Louis' Board of Directors. Boot Strap is
a yet another great way for Veterans to experience a mentored
entrepreneurial educational and have the ability to obtain startup
funding.
Small Business Development Centers
TVC has signed an MOU with the Association of Small Business
Development Centers (ASBDC) to create a national TVC / ASBDC strategic
alliance with the goal of working cooperatively to enhance outreach and
services to Veterans through both organizations. Veterans will be able
to visit nearly 1000 local SBDC service Centers for free, face-to-face
business consulting and low cost training.
Owner-Operator Class--Becoming an independent owner operator
Today there are excellent opportunities for Veterans in over-the-
road transportation. TVC, Metropolitan Community College-Blue River,
and the Owner-Operator Independent Drivers Association (OOIDA) have
formed a partnership to provide Veterans and Service-Disabled Veterans
with entrepreneurial training through a 3-day seminar designed to
assist Veterans seeking to become owner-operators. The seminar provides
information about the process of becoming an owner-operator, helps
potential owner-operators overcome challenges they face, and helps
Veterans form reasonable expectations about being an owner-operator.
The seminar is taught by experts in each field through OOIDA's
experienced staff. Earlier this year we conducted the first seminar.
With the success of this event, a second seminar is planned for the
fall of 2007.
In addition to the programs I have already described, TVC is
currently providing Veterans with a wide range of tools and resources
to match their specific business needs and goals directly through TVC's
web portal. These programs are designed to quickly address Veteran
business questions and issues in an environment where Veterans and
their family members, particularly those returning from the current
wars in Iraq and Afghanistan, are increasingly becoming more
technologically savvy. The home page is formatted with direct links to
both TVC offerings and important partner links with agency ex-officio
members, including VA's Center for Veteran Enterprise, the SBA, DoD and
other key providers of service.
Business Matchmaking
Through a partnership with SMA Global, a Veteran owned and operated
business, TVC is now a cosponsor of their series of Business
Matchmaking conducted in concert with SCORE. There are four events
conducted during each calendar year with an additional two events
delivered to OSDBU and the Department of Energy. The first two events
for 2007 have been held in Atlanta and Maryland. The event draws more
than 1,000 companies seeking contracts with the 160 plus contracting
sources in attendance. In Atlanta 2,200 interview sessions were
conducted. Of the 1,000 companies 200 were owned by Veterans and
Service-Disabled Veterans. Our partnership with SMA Global will bring
TVC closer to Veteran and Service Disabled Veteran companies that have
participated over the past 3 years and allow TVC to offer services
quickly and directly to companies ready to activate their business
plans.
Boots 2 Business--Transitional Skills for Sucess
Boots2Business www.boots2business.com is a comprehensive online
resource, providing education and workplace training that is uniquely
tailored to meet the needs of America's military personnel including
those in theater in Iraq and Afghanistan, as well as Veterans, members
of the National Guard and Reserve, Service-Disabled Veterans, and their
families. Boots2Business combines elements from successful programs
used independently in thousands of vocational schools, job-training
centers, community colleges, detention and correctional facilities, Job
Corps centers and adult education programs nationally. TVC has
integrated these elements into a cohesive and interactive online
program that provides support to the basic, transitional, workforce,
family and entrepreneurial needs of Guard and Reserve Veterans,
Service-Disabled Veterans, and their families.
This program has five key areas:
Basic Skills, Catching up / Stepping up
Transition Skills, Job and Career Preparation
Work force Success Skills, Getting a job and keeping it
Entrepreneurial Skills, Start and Grow a small business
Family Resource Center, Life and family support
Within these five sections are 31 clusters with 1,000 course
lessons and many tutorials to guide the student through their specific
needs. Access to this site is in the form of a scholarship to the
Veteran and their family. Each scholarship is for 1 year and is
provided by granting organizations or by TVC directly. The cost for
each scholarship is $100. Were a Veteran to purchase access to all the
elements of Boots to Business without TVC, the cost would exceed
$132,000 per year.
TVC currently has 300 scholarships for Veterans and Service-
Disabled Veterans in New Jersey that are provided by the Henry H.
Kessler Foundation. As I have already pointed out, TVC is directly
sponsoring a block of 600 scholarships divided equally between its
three hubs. Each hub will coordinate a statewide outreach giving Boots
to Business a four-state network. An additional 200 scholarships have
been made possible through a grant from NEC Foundation of America for
national outreach. TVC is currently working with a number of
corporations and foundations to extend this valuable scholarship
program to all Veterans and their families.
d-VETS (Disabled Veterans Entrepreneurial Training Solutions)
Through a grant from the Henry H. Kessler Foundation, TVC is
providing New Jersey's Service-Disabled Veteran entrepreneurs with
comprehensive support in starting or growing small businesses. The
mission of the program is to foster and promote opportunities for
Service-Disabled Veterans to gain self-sufficiency through
entrepreneurship by providing participants with education, mentoring,
access to capital, and access to surety bonding. This program is
designed as a state model that can be replicated nationwide to serve
America's Service-Disabled Veterans. As mentioned earlier, the Kessler
grant provides 300 Boots2Business scholarships to New Jersey Veterans.
Deploy Proof Your Business
TVC has launched a comprehensive new program, Deploy Proof Your
Business, designed to assist members of the National Guard and Reserve
in protecting their businesses when they are deployed. ``Deploy Proof
Your Business'' includes sections on suspending and sustaining your
business as well as a comprehensive section comparing the two options
side-by-side.
With helpful tools, links, checklists and other online resources,
this site is developed as a complete program to answer the questions
and frustrations many National Guardsmen and Reservists have when they
leave their businesses. Based on the premise that the earliest
preparation is the best preparation, this program will assist both new
and established businessowners in modifying their business plans,
creating training plans, and managing inventory prior to leaving their
business for an extended and often indefinite period of time. This
program in no way replaces instruments from SBA or other organizations.
It does, however, place in one location access to all the current
programs available.
Jim Clair, of Cranberry Township, Pennsylvania is a business owner
and Member of the National Guard who realizes that he must prepare his
business for deployment. Jim, a former United States Marine, 1983-1987,
is the owner of Ultimate Defensive Driving School. Jim joined the
Pennsylvania Army National Guard last year at age 40 specifically to
fight the War on Terror. He and his company are looking at Deploy Proof
Your Business as we speak to prepare for his possible deployment to
Iraq and or Afghanistan. As Jim says, ``While I have yet to be deployed
to Iraq or Afghanistan, I realize that deployment is a very real
possibility and something I must prepare for as a businessowner. After
all, my family and business count on it.''
ConnectVets Business Forum
ConnectVets Business Forum is a mentored online meeting place for
Veteran entrepreneurs to interact with each other through a peer
network. The Forum is a place where Veterans can post business
questions, offer advice, and share business experiences. The program
launched the second week of March, and reports show that 68,000 unique
hits resulted in its first two weeks alone.
Virtual Business Incubator
The Veterans Virtual Business Incubator (VBI) created for TVC by
Knowledge Industries is a complete one-stop resource for Veteran
entrepreneurs starting or growing a small business. The VBI guides
Veterans through businessownership with customized support tools and
the ability to search by state for local business resources. In FY 2006
this online tool saw 8,000 direct business connections through its
300,000 unique hits.
Vitual Business Resource Center
TVC, in partnership with SCORE, created a Veteran front-end portal
to assist Veteran entrepreneurs in getting the one-on-one support they
need to become successful in their business ventures. Through this
direct link on TVC's website, Veterans are able to access SCORE's
network of experienced and qualified mentors who can answer business
questions, provide advice, and offer guidance. TVC is seeing between
350-600 links daily through this portal partnership.
Transition Assistance Program (TAP)
TVC was asked by the Department of Defense (DoD) last August to
write a new section of the TAP Manual for Active Duty and members of
the Guard and Reserve. Information about entrepreneurship and the
assistance available from TVC and SBA is now included in the ``Active
Duty Preseparation Guide,'' as well as the ``Transition Guide for the
Guard and Reserve''. As a result, all separating military members will
have the opportunity to learn about the programs and services TVC
provides and actually start planning their business venture prior to
their separation from the service. Active military can already access
this information on the DoD's TurboTAP Web site www.TurboTap.org, while
members of the Guard and Reserve can begin accessing this information
on May 31, 2007. We understand that DoD plans a formal rollout of these
programs on June 9th.
``Veteran's Business Video Library''
This is a first for TVC: an online, streaming, six-video segment
containing key coverage (4\3/4\ hours) of ``Veterans Doing Business
with the Department of Defense''. Taped last December in Dallas, Texas,
this compendium is now available for all to recap the event or, for
those unable to attend, to participate and gain the important
information that was provided to attendees. It is our hope that future
events conducted by TVC or any agency or Veteran organization will also
be available through this vehicle.
TVC FY 2006 Annual Report to the President and Congress
In TVC's Strategic Plan for FY 2006, staff members were directed to
reach 10,000 Veterans directly and through TVC's partner network. TVC
is pleased to report that the goal was met and exceeded. Through TVC's
headquarter staff and partners, TVC attained 140 percent of the goal by
supplying face-to-face services to 14,026 Veterans. In addition to this
direct interaction, it should be noted that during the final 5 months
of FY 2006, TVC has achieved more than one million hits to its new web
presence at www.veteranscorp.org including 17,586 downloads of TVC
materials from 224,284 page views. That equates to 100,000 unique
visits, each lasting more than five minutes, an eternity in web time,
yielding significant electronic outreach and support to Veterans
online. Combined, it can be said that the investment made by Congress
toward TVC's FY 2006 funding has reached 119,431 individuals, oralmost
12 times the FY 2006 goal of 10,000.
The appropriation of $1.5 million to TVC for FY 2006 provided
significant benefit to Veterans through TVC's outreach, education and
mentoring, in addition to the Access to Capital and Access to Bonding
programs outlined above. Analysis of FY 2006 expenditures indicates
that 21.83 percent on spent on G&A, 10.15 percent on fundraising and
68.02 percent were spent on program services.
I would like to submit a complete copy of our 2006 Annual Report to
the President and Congress for the record.
Authorization Legislation in 110th Congress
Legislation is currently being drafted by Representative Susan
Davis of San Diego that would provide for a 5 year authorization of The
Veterans Corporation that would include direct program services while
acting as an entrepreneurial catalyst / clearinghouse / facilitator /
broker for Veterans, Service-Disabled Veterans, and members of the
Armed Forces transitioning from military service in Iraq and
Afghanistan into the business community. In addition, Members of
Congress and their staff would like TVC to provide the Reservists,
National Guard members, and their families with pre / post-deployment
assistance to preserve family owned businesses, like our Boots2Business
and Deploy Proof Your Business programs. TVC would like to establish a
grant-making program to assist organizations at the national, state and
local levels in these important efforts.
Conclusion
Madam Chairwoman, 2007 finds Veteran entrepreneurship alive and
well; however, the programs defined under PL 106-50 are not able to
step up to the increasing demand. We have seen thousands of servicemen
and servicewomen return from the Iraq and Afghanistan theaters and will
see these numbers grow in the coming months and years. These new
Veterans and Service-Disabled Veterans along with a large number of
Guard and Reservists will return to the country that they fought to
defend. TVC is ready, willing and able to assist them whether they have
to spend some time in a hospital to recover from their wounds or choose
to settle in the streets of an urban environment or the countryside of
a rural local.
TVC's strength is in its ability to bring together the best in
public and private entities to leverage scarce Federal dollars in
effectively and efficiently assisting Veterans, Service-Disabled
Veterans, and members of the National Guard and Reserves, who want to
start or grow small businesses. By benefiting from the strong resources
already available from national business networks, and by eliminating
duplication of efforts through strategic partnerships, TVC has the
programming and the capacity to serve the needs of Veterans in all
fifty states.
Thank you Madam Chairwoman. I will be happy to answer any questions
you or the Committee might have.
[LETTERS OF SUPPORT]
Disabled American Veterans
Washington, DC.
April 20, 2007
Dear Representative Davis:
On behalf of the 1.3 million members of the Disabled American
Veterans (DAV), I encourage you to support the authorization and fiscal
year 2008 appropriations funding for the National Veterans' Business
Development Corporation (the Veterans' Corporation) programs and
services to expand entrepreneurial opportunities for disabled veterans.
The 1.3 million members of our organization are veterans who became
disabled by injuries or illness during wartime military service to our
Nation. Disabled veterans seeking a viable livelihood face far greater
challenges and a higher unemployment rate than nearly any other
category of citizens in the United States.
Despite federally mandated provisions to assist disabled veterans
in overcoming barriers to gainful employment, many employers remain
unable to accommodate some of the most severely disabled for a variety
of reasons. For example, some veterans require frequent medical
treatments that prohibit them from maintaining regular working hours.
These veterans often choose to operate their own businesses where they
need not conform to the demands of a set schedule. Many other disabled
veterans choose entrepreneurship as a form of livelihood as a matter of
preference.
It is our duty as a grateful nation to ensure that those who have
sacrificed so dearly in the name of freedom have the opportunity and
support needed for self-sufficiency. In addition to improving the lives
of disabled veterans and their families, we are fortifying our Gross
Domestic Product and economic vitality. Small businesses create
millions of new jobs and generate billions of dollars annually.
We believe the Veterans' Corporation created by P.L. 106-50, is
uniquely positioned to provide disabled veterans with superior
entrepreneurial training and business resources that allows them to
start or grow a business; and in turn contribute to the economic well-
being of your district and state. The Veteran's Corporation's numerous
programs and services have resulted in the following accomplishments:
Veterans served--8,055 to date, or on average a 1,000
Veterans a month
Courses / class hours completed--Over 8,000 trainings
hours provided and 96,388 student hours
Business Start Ups since initial contact with client--552
Veteran owned businesses started (average cost to TVC $1,000.) Business
growth as a result of interface with client--469 jobs retained, 667
jobs created
Funding as a result of work and / or facilitation with
client--OVER $86 million
Teaming / Mentorship of clients with other companies--68
Veteran owned businesses now partnering
In addition, TVC is now offering new services related to--
Surety Bonding for Veteran owned businesses looking to do
work with the government through a partnership with the Surety
Association of America
Access to Capital through a financial services desk for
micro loans and larger capital needs too Veterans'
Virtual Business Incubator in partnership with Score to
provide Veterans anywhere in the country, tools and resources to start
their businesses
I am sure you will agree with me that the Veterans' Corporation
offers an impressive array of services to disabled veterans and that it
should be continued as thousands of wounded service-members return from
the War on Terror.
Thank you for supporting our Nation's disabled veterans and their
families.
Sincerely,
Brian E. Lawrence
Assistant National Legislative Director
Iraq and Afghanistan Veterans of America
New York, NY.
May 10, 2007
Honorable Susan Davis
1526 Longworth House Office Building
Washington, DC 20515
Congresswoman Susan Davis:
Soldiers and Marines are natural innovators. They are required to
overcome every obstacle and complete the mission no matter what. When
soldiers are not hard-charging to their objectives, they spend almost
all their time doing one thing: thinking about, dreaming about, and
talking about what they will do when they get home. The countless hours
spent sitting in a Humvee has become has a fertile playground for ideas
and innovations. I will never forget the months of planning my driver
and team leader, SPC Langley and SGT Fabacher, spent laying out every
detail of their future lawn mowing business.
The Veteran's Corporation (TVC) is a Federally chartered nonprofit
organization charged with creating and enhancing entrepreneurial
business opportunities for Veterans, including service-disabled
Veterans. By providing access to capital, business services,
entrepreneurial education, surety bonding, insurance, prescription
coverage and by creating a veterans business directory, TVC has strived
to help soldiers like SPC Langley and SGT Fabacher achieve their
dreams.
TVC has overcome some tough obstacles and become an invaluable
resource to veteran entrepreneurs. TVC has greatly expanded its online
resource center and programs like ``Deploy Proof Your Business'' are
powerful tools for deploying servicemembers. The Iraq and Afghanistan
Veterans of America (IAVA) strongly supports any efforts to bolster the
TVC and give it the opportunity to help turn those Humvee daydreams
into a reality.
We applaud the work of Congresswoman Susan Davis and her work to
expand the scope and mission of the TVC.
Sincerely,
Patrick Campbell
Legislative Director
Prepared Statement of William D. Elmore, Associate Administrator,
Veterans Business Development, U.S. Small Business Administration
Chairwoman Sandlin, Ranking Member Boozman, and other distinguished
members of the Committee, thank you for the opportunity to appear
before you today to share information on the state of Veteran
entrepreneurship and self employment, and the efforts of the U.S. Small
Business Administration (SBA) to assist and support veterans, service-
disabled veterans and Reserve Component members who are self-employed
or small businessowners who have been or may be called to active duty
for the Global War on Terror. I am William Elmore, the Associate
Administrator for Veterans Business Development (AA VBD). I am pleased
to be here representing SBA Administrator Preston and the many
dedicated SBA employees who assist veterans and reservists every day. I
am grateful for this opportunity to share with you some of the
initiatives and accomplishments on behalf of veterans and reservists
the SBA has made over the past 6 years. As expressed in the January
24,2007, Memorandum For Heads of Departments and Agencies jointly
issued by Administrator Preston and Office of Federal Procurement
Policy Administrator Denett, the administration is broadly committed to
enhancing all of our entrepreneurial programs and services for veterans
and reservists, especially those returning from duty in the Global War
On Terror, and for those service members injured or disabled in service
to America.
The very nature of SBA' s mission necessitates coordination, access
and delivery of a full range of resources and program activities that
support successful entrepreneurship. We deliver most of our lending
assistance through thousands of private lenders, and we provide most of
our business counseling, training, and planning assistance through our
resource partners, which includes approximately 15,000 third party
business development specialists and experienced business men and women
volunteers. SBA is the central policy and program manager for the
Federal procurement programs for service-disabled veteran-owned-small
businesses, women-owned small businesses, small and disadvantaged
businesses, and socially and economically disadvantaged small
businessowners. This is accomplished through a programmatic, policy,
and regulatory framework established by Congress and our technical
experts, including procurement goal setting, oversight, and
intervention with Federal agencies, and facilitating public and private
matchmaking initiatives. To accomplish the SBA mission, we maintain a
nationwide network of 68 district offices (each one with an assigned
Veterans Business Development Officer, VBDO), 10 regional offices,
various servicing centers for lending oversight and loan processing,
and over 100 field procurement assistance experts. Weare America's
disaster assistance lender for both homes and for small businesses; and
we provide support for international trade initiatives. Our 68 district
offices and other field offices coordinate and deliver local and
national support, provide oversight, and help carry out our National
program responsibilities.
As the Associate Administrator for Veterans Business Development, I
manage our national program for veterans and support Administration
programs and policies for veterans and reservists. I coordinate SBA
activities with other Federal, state and local government programs, and
with not-for profit and private partners.
Each year, my office delivers direct assistance to over 25,000
veterans and reservists through five Veterans Business Outreach Centers
and through special competitive funding for District Office-Veterans
Outreach Initiatives coordinated by our 68 VBDOs. SBA's Veterans'
Business Development Office acts as a liaison and technical expert to
our Federal partners, including the Departments of Defense, Labor,
Veterans Affairs and other agencies with procurement authority, and, I
act as an ombudsman for full consideration of veterans in every
Administration program.
Each year, SBA provides reportable direct and indirect assistance
to more than 100,000 veterans and reservists who participate in every
SBA program. While improved services are being delivered to veterans,
reservists and discharging service members in most of SBA's core
programs, Administrator Preston and Deputy Administrator Carranza have
tasked each program office at SBA with reviewing their programs and how
they support veterans' small business success. We are identifying
additional or more specific steps that every program can take to better
deliver SBA assistance to veterans, reservists, discharging service
members, and family members.
Recent examples of improved services to veterans, veteran
reservists and discharged service members is inclusion as a target
market in our Community Express Loan program that offers expedited loan
processing with mandatory business planning technical assistance. We
have recently improved our Surety Bond Guarantee program for service-
disabled veterans and other veterans, and we are exploring new ways to
further target the veteran, reserve and guard community through our
lending programs. Thus far, the results have been good; the number of
new loans being made to veterans has increased significantly. The
number of new loans to veterans has grown from 4,800 in FY 2000 to
approximately 8,000 in FY 2006.
Public Law 106-50 established a 3 percent Federal procurement goal
for prime contracts for small businesses owned and controlled by
service-disabled veterans (SDV) and established a best-efforts clause
for veterans in Federal procurement at the subcontracting level. While
the government has yet to achieve the required 3 percent goal for
Federal procurement, we are making progress toward it. In 2004, the
President issued Executive Order # 13360, and preliminary data shows
that both SBA and the Department of Veterans Affairs each exceeded
their respective 3 percent goals for FY 2006. Leading by example, this
represents a significant improvement for both agencies over
achievements in FY 2005. This growth toward achieving the 3 percent
goal is due to the ongoing efforts by VA, SBA, Federal agencies and
their many contracting officials that are making serious and diligent
efforts to identify and contract with SDV small businesses.
In 1999, when HR 1568 became P.L. 106-50, there was a serious gap
in basic knowledge about and data on veteran businessowners in America.
For almost 15 years, no effort had been undertaken to understand what
this community of existing and prospective entrepreneurs represented or
required. Beginning in FY 2001, the SBA's Office of Advocacy, with the
support of my Office of Veterans Business Development, initiated
research into veterans' entrepreneurship, and Advocacy's initiatives
continue. We have learned that prior to 2003, veteran and service-
disabled veteran participation in Federal procurement was seriously
undercounted and underreported for a variety of reasons. We have
learned that there were no good or reliable databases of veteran and
service-disabled veteran businessowners that existed nationally in the
public or private sectors. We have learned that approximately 15
percent of veterans are successfully selfemployed or small
businessowners and that another 22 percent of veterans are taking steps
to become small businessowners or are thinking seriously about doing
so. We learned that, like all small businesses, access to capital and
access to and knowledge about business development programs are key
needs of veterans. We have learned that military service is important
in leading to veterans' success as entrepreneurs, and that private
sector experience is even more important for veterans' success as
entrepreneurs. We have learned that the difference between successful
self employment rates for veterans and service-disabled veterans is
explained in part because some service-disabled veterans do not
participate in the private labor market.
As a part of our efforts to increase understanding of the veterans
and service-disabled veteran community of entrepreneurs, and at the
request of the SBA Office of Advocacy and the veterans' advocacy
community, the Census Bureau included two questions in their 2002
Survey of businessowners regarding the veteran and SDV status of small
businessowners with employees. The 2002 Census Survey marks the first
time we have an accurate estimate of the number of SDV small
businessowners in America. This 2002 Census survey found that
approximately 0.7 percent of small businesses in America with employees
are owned by service-connected disabled veterans and that 14.1 percent
of small businesses with employees in America are owned by veterans.
Each year, our Office of Entrepreneurial Development (ED) and our
resource partners provide small business counseling and training for
approximately 1.5 million aspiring, startup and growing small
businessowners. Annually, close to 90,000 of these customers are
veterans, service-disabled veterans, reserve component members and
active duty personnel. One of our ED programs is our Small Business
Development Center (SBDC) program. Our SBDC National Office provides
program design, core I operational funding and oversight to almost
1,100 SBDCs. In addition, we deliver assistance through the expertise
of almost 400 Service Corps of Retired Executives (SCORE) chapters and
approximately 11,000 experienced SCORE business counselors, and through
100 Women's Business Centers, whose services are not restricted to
women only. We also provide a robust range of online business
counseling and training opportunities supporting everything from start
up and early stage decisionmaking to significant expansion and growth
assistance.
Let me turn my attention to our efforts on behalf of small
businessowners who are members of reserve components of the U.S.
Military and have been or may be activated for the Global War on
Terror. In August 2001, we began offering and continue to promote the
availability of our Military Reservist Economic Injury Disaster Loan
(MREIDL) program as one tool that can be of great assistance to an
activated reservist small businessowner. We have implemented a
comprehensive outreach program that includes veterans and reservists,
and we have strengthened our business counseling and training programs,
most notably our SCORE, SBDC, VBOC and District Office programs to
inform, develop and deliver pre and post mobilization business planning
assistance that can be critical to economic success and survivability
to reservist small businessowners. We continue to work with various
offices and programs of the Department of Defense, including the
National Committee for Employer Support of the Guard and Reserve
(ESGR), with the Assistant Secretary for Reserve Affairs, Military
Family Support Centers and 676 Committee, and we continue to support
the Department of the Army in the envisioning and development of the
proposed Army Advantage program. After the September 11, 2001 attacks
on America, we established an SBA Committee to coordinate outreach and
service delivery to Reservists. We created and have distributed more
than 400,000 SBA Reserve and Guard fact sheets; and we established
special web pages for reservist small businessowners, and began working
with the Department of Defense. We have and continue to produce
detailed business planning guides as part of our comprehensive Reserve
and Guard Business Planning kits and have distributed more than 40,000
of these kits directly to Reserve and National Guard units, to
reservists, to SBA Resource Partners, to Federal, state and local
partners, and at hundreds of SBA sponsored events. Two years ago, we
requested and secured the authority from Congress to include reservists
in our definition of veteran for purposes of our comprehensive outreach
effort, and we included veteran reservists in our Community Express
Loan Program to provide additional access to capital beyond our MREIDL
program.
Again, I thank you for this opportunity to testify before you
today. I am proud of the progress we have made in our knowledge of and
assistance for aspiring and existing veteran entrepreneurs and I look
forward to continuing to enhance these efforts.
This concludes my testimony, and I welcome your questions.
Prepared Statement of Scott F. Denniston, Director, Office of Small and
Disadvantaged Business Utilization, and the Center for Veterans
Enterprise, U.S. Department of Veterans Affairs
Madame Chairman and Committee Members, thank you for convening this
hearing to assess the current state of the Federal Veterans'
Entrepreneurship Program. I am honored to represent Secretary
Nicholson, Deputy Secretary Mansfield and the dedicated employees
throughout the Department of Veterans Affairs who serve our veterans
daily.
I have good news to report. The Veterans' Business Program is
working well in VA. Last Fiscal Year, our procurement budget was $10.3
billion. We spent $346 million with Service-Disabled Veteran-Owned
Small Businesses (SDVOSBs), approximately 3.38 percent. We spent 6.35
percent of our total procurement dollars with Veteran-Owned Small
Businesses (VOSBs). This amounts to approximately $651 million. I am
even more pleased to report that VA will be the first Cabinet agency to
sustain and increase our achievements.
We attribute our success to 4 principal factors. First, we are the
Department of Veterans Affairs. Supporting veterans is our mission.
Second, and most significantly, our leadership demands commitment to
veterans in business. Third, our partners share our passion for
ensuring veterans' success. Fourth, veterans doing business with our
Department have proven themselves to be solid performers. We are now
building on their successes.
As you know, VA puts veterans first. Our personnel are focused on
veterans' success. Self-employment and businessownership are natural
outcomes for the work accomplished in our healthcare and benefits
administrations. VA offers numerous opportunities for new businesses
through our micro-purchase program. We have thousands of actions under
the simplified acquisition threshold where young businesses have the
opportunity to flourish. We have regional and national contracting
opportunities for more robust businesses. We also require large prime
contractors to tell us how they will utilize veterans and service-
disabled veterans in their performance. We have creative contracting
officers who are recognized for their support of veterans in business.
All these factors together have helped us achieve prominence in this
program.
Small business programs are leadership-driven. VA was the first
Federal agency to implement procurement goals for veterans and service-
disabled veterans. We did this in 1984. VA was the first Federal agency
to implement the landmark set-aside provisions of Public Law 108-183.
This tool made a significant difference in VA's ability to comply with
the mandatory 3 percent Service-Disabled Veteran-Owned Small Business
procurement goal. VA organized the Executive Order 13360 Work Group to
encourage alignment of Federal agency strategic plans to increase
utilization of service-disabled veteran-owned small businesses. Our
leadership requires that program executives personally report their
accomplishments at our quarterly Senior Managers' Meetings. As a result
of Public Law 109-461, VA is now the first agency to place service
disabled veterans and veterans at the top of our priority source lists.
Plus, this law provides VA with direct sourcing authority, a tool
unique among Federal agencies. With this new program, we expect a
marked increase in expenditures with service-disabled veterans and
veterans in Fiscal Year 2009.
Visionary leadership is not exclusive to VA. Many of our
accomplishments would not have been possible without the teaming
provisions in the Small Business Administration's (SBA) Service-
Disabled Veterans' rule. Also important are the Corporate Teaming
Agreement guidelines from General Services Administration (GSA) and
their Acquisition Letter #V-05-12, which permits evaluating
socioeconomic status as a primary factor when making a best value
determination when using the Federal Supply Schedules. This is evidence
that support for veterans is wide-spread.
We celebrate and applaud the work of our partner organizations. Our
first partnership was with the Association of Procurement Technical
Assistance Centers (PTACs). Funded by the Defense Logistics Agency,
these offices educate owners new to the Federal marketplace. We include
referrals to PTACs in our solicitation documents to ensure that owners
understand our Federal and VA rules before they sign an offer or a
contract with us. The PTAC program is fundamental to our success.
As you may know, VA operates the Center for Veterans Enterprise
which staffs a national call center to assist veterans interested in
businessownership or expansion. This office has 16 employees, 12 of
whom are veterans. The staff in CVE talks with veterans, their families
and their business partners daily. CVE's business coaches routinely
refer callers to our partner organizations or to the volunteers who
form the government or Corporate Advocates for Veterans Enterprise. One
of our steadfast partners is the General Services Administration (GSA).
We have cosponsored regional conferences with GSA and assisted in their
Veterans Technology Services (VETS) governmentwide Acquisition Contract
(GWAC). We look forward to using this vehicle for years to come when VA
personnel need information services support. At all of our outreach
programs, we distribute the tool kit for veteran-owned small
businesses, which was jointly developed and co-branded by GSA and VA.
It contains legislation and policy documents, information on how to
market to Federal agencies, a list of Federal Veterans' Business
Advocates and templates to assist businessowners. This tool has proven
to be so successful it is now in its fourth edition.
We have received great support from the military services. The U.S.
Air Force was the first department to offer assistance to us in 2000.
They shared their resources with us, giving us several sessions on
their cable television program, Opportunities Showcase. Mr. Tony
DeLuca, then the Small and Disadvantaged Business Utilization Director,
carried our message to audiences in each of his numerous presentations.
Since then, we've continued our joint outreach efforts, conducting road
shows with the Air Force, the SBA and VA to reach military program
managers. We are in conversation about FY 2009 and beyond activities.
The Army's Small Business Program Office also has a sustained
partnership with VA. We have jointly organized the National Veterans'
Business Conference for the past 3 years. This year's program will be
June 25-28 in Las Vegas. With the comprehensive support of the military
community, a broad-base of its defense contractors, committed
volunteers from a wide range of Federal agencies and the
businessowners' community, last year's program was well-attended. More
than 1200 participants joined together to focus on how to improve
opportunities for veterans, especially service-disabled veterans, in
prime and subcontracts. More importantly, the owners' community spread
the word that the National Veterans' Business Conference is a must-
attend event due to the caliber of program managers and executives and
the quality of information exchanged in that forum. We are very pleased
to assist in organizing the 3rd annual conference which we hope will be
even more successful. Efforts with the Army continue throughout the
year. The Corps of Engineers routinely dispatches advance announcements
of forthcoming service-disabled veteran set-asides to owners in the
VetBiz Vendor Information Pages database. These personnel conduct
advance briefings to the community. As a result, you'll see many of
their offices honored in our annual Champions' awards program.
We are seeing an explosion of exhibitors proudly displaying
``SDVOSB'' or ``VOSB'' on their conference banners. Some firms are
enjoying rapid growth. GSA recently hired Len Johnson of JDG
Communications for their Federal Supply Schedule advertising needs, a
$25 Million award. SBA also hired JDG for their support in Business
Gateway promotions. Quality Support won a $38.5 Million award from the
State Department to process visa applications. The Army Corps of
Engineers has awarded several Indefinite Delivery Indefinite Quantity
(IDIQ) contracts using the Service-Disabled Veteran-Owned Small
Business set-aside authority. VA recently awarded a Microsoft license
support contract to MicroTech, using the Corporate Teaming Agreement
provisions under Federal Supply Schedules. This award is valued at $56
Million a year for 7 years. As a result of matchmaking facilitated by
the Center for Veterans Enterprise, a service-disabled veteran-owned
joint-venture was established that successfully pursued a large
construction project. VETCON1 won a $30 Million award to build a
facility in Menlo Park. This is important to VA because many of our
engineers mistakenly believe that disabled veteran-owned businesses
cannot obtain bonding for our larger projects. Big awards help us get
the attention of program managers who too often will say, ``no small
business can do my project.'' We also celebrate the smaller successes,
like Joe Marchesani of Markee Distributors. We met Joe several years
ago. He was trying to sell medical device batteries to VA but was
having difficulty getting in. Now, he's happy to report he's in more
than 100 of our locations, doing business on purchase cards.
VA's Center for Veterans Enterprise hosts the VetBiz.gov web portal
which enables veterans to quickly link to our partner organizations.
CVE manages the VetBiz.gov Vendor Information Pages (VIP), a database
containing information about products and services offered by veterans
and service-disabled veterans. Veterans in this database may elect to
receive daily extracts from FedBizOpps and extracts from VA's Forecast
of Contract Opportunities. We also use the database to blast early
alerts about future requirements or education conferences, such as the
3rd National Veterans Business Conference. Last month, the State of
Washington announced a new program to promote utilization of service-
disabled veterans in their state requirements. They will use the VIP
database as their sourcing program. We hope to see other states adopt
similar measures.
CVE offers free market research, training and other services as may
be requested by our Federal partners and their prime contractors. We
recognize their hard work in our annual Champions of Veterans
Enterprise Awards program each June.
I am proud to report that our work is being well-received. The
Veterans Business Journal is considered the premier trade magazine in
the veterans' business community. Last September, it conducted its
first readers' survey. CVE was voted the organization that provides the
best support to veterans in business. We appreciate this vote of
confidence and will strive to repeat this honor in 2007.
To promote awareness and utilization of veterans in business, CVE
distributed more than 3,000 posters to prime contractors and government
offices last October.
To expand awareness of startup assistance, we dispatched Operation
businessownership DVDs for use in Transition Assistance Program
briefings. Both SBA and CVE are highlighted under ``Small Business
Resources'' in the Vocational Rehabilitation and Employment Program
pocket guide produced by VA's Veterans Benefits Administration. In the
annual Federal Benefits for Veterans and Dependents' book, information
about CVE appears under Transition Assistance. In addition, each year,
VA's Compensation and Pension Service mails cost-of-living adjustment
letters to disabled veterans. Veterans receive information about
startup and expansion assistance from CVE in this letter. Army
Knowledge Online's Web site reaches 660,000 personnel. Our web portal
link is prominently displayed on that site, which we understand will
soon become a DoD-wide site. We are also prominently displayed on
Military.com's site which is generally used by veterans for a variety
of information. The VetBiz.gov link also appears in USA.gov and on the
OSDBU.gov web portals. We greatly value the assistance from these
partner organizations as it expands our reach beyond our limited
resources. We teach owners that business is about successful
relationships. We think we have built some good ones.
In the commercial marketplace, more than 300 franchisors have
joined the VetFran program, which VA and the International Franchise
Association refreshed in 2002. Currently, more than 700 veterans have
opened franchises under this program. In VetFran, veterans are eligible
for reduced franchise fees and other support. One example is Little
Caesar's Pizza. In November, they began a 12-month program of benefits
to veterans and service-disabled veterans to help them open pizza
shops. The benefit to a disabled veteran approaches $70,000. We are
seeing renewed interest from the corporate community to outreach to
veterans. At our June conference, we will be renewing partnership
agreements with several Federal prime contractors who recognize that
veterans in business are solid performers.
Before closing, I know you are interested in what more needs to be
done. We encourage other Federal agencies to continue, and increase,
their use of the service-disabled veteran set-aside tool. I would also
recommend increased attention to conducting and documenting training of
Federal agency personnel in using the tools available through the
Federal Veterans Entrepreneurship program. Only when we have
comprehensive awareness and buy-in for this program will we see global
successes. Agencies are required to post their strategic improvement
plans for enhancing achievements with service-disabled veterans in
business. Veterans who call us want to see these plans, and the annual
reports, posted in an easy to identify location. Many contracting
activities are still struggling with a lack of capable businesses in
specialized industries. A method to incentivize prime contractors to
incubate new small businesses in these underrepresented fields will
benefit all parties. Others will address, I'm sure, the chronic problem
of access to capital. VA will also focus on subcontracting
accomplishments.
I hope you will agree that opportunities for veterans in business
are abundant and that there is widespread support for this program.
Madame Chairman, thank you again for convening today's hearing. I
will submit my written statement for the record. I welcome your
interest and I am prepared to answer any questions that you or the
members may have.
Prepared Statement of Louis J. Celli, Jr., Chairman, Advisory Committee
for Veterans Business Affairs, U.S. Small Business Administration, and
Chief Executive Officer, Northeast Veterans Business Resource Center
EXECUTIVE SUMMARY
Veterans' entrepreneurship has come a long way over the last few
years. In the 1930's and 1940's veteran status was highly regarded by
the local, national and most importantly, the business community.
Veterans' issues and veteran status usually follow the trend of the
prevailing national climate.
In the late 1960's and early 1970's America, as a nation continued
to grow and mature. As we did we experimented, tested boundaries and
struggled for our sense of identity as individuals. As this evolving
generation of Americans sought to be independent as individuals, we
believed it necessary to rebel against authority. 200 years earlier
America was a nation of rebels and in 1970 we were a nation of
individuals rebelling.
One of the very unfortunate casualties of that time period was the
American GI. Service members represented the closest thing that
American individuals could identify with as the ``government'', and
subsequently misdirected their anger and hostility toward American
service members. This misguided stigma damaged the image of the
American military for decades and residual damage from that time period
can still be felt today.
While most of mainstream America understands the dedication,
commitment and sacrifice of today's armed forces, transitioning service
members and military veterans still face discrimination and missed
opportunities with regard to employment and self employment endeavors.
When Congress passed the Veterans Entrepreneurship and Small
Business Development Act 1999 (Public Law (PL) 106-50), it stated in
its findings that America had not done nearly enough to `assist
veterans, particularly service-disabled veterans, in playing a greater
role in the economy of the United States by forming and expanding small
business enterprises.'
There are seven parts to PL 106-50 which were all designed to
operate independently while working toward one common goal. Each of
these entities; the SBA office of Veterans Business Development, the VA
Center for Veteran Enterprise, the SBA Advisory Committee, the Veterans
Corporation the Veterans Representative for SCORE and all of the
others, would theoretically work cooperatively toward the common goal
of assisting veteran businessowners AND SUPPORT EACH OTHER while
WORKING TOGETHER. 106-50 was a 4 year plan, and at the pinnacle of the
4th year all of these agencies, idealistically would have been working
together and supporting each other so they might serve a greater
population of veterans as a team.
Herein lies the problem. Rather than work together, each of the
agencies chose their own path and developed their own mission
accordingly. Congress had intended that TVC be the core element at the
center of this initiative and lead the veteran entrepreneurship mission
with the assistance and support of the Federal agencies into the 21st
century and beyond. What they could not have predicted was that in the
absence of direct supervision, none of these separate entities felt
obligated or responsible to cooperate. Thus, the VA went in their
direction, the SBA in their direction, DoD never even showed up and TVC
was left an orphan. A 12 million dollar orphan without any
entrepreneurs or nonprofit experience to build this new business.
Oral Testimony
Good morning Chairwoman Herseth Sandlin, Ranking Member Boozman and
Members of this Subcommittee. Thank you for the invitation to come
before you and discuss veteran entrepreneurship.
It's been 7 years since the unanimous passage of Public Law 106-50,
and this committee now asks ``How are we doing?''
My name is Louis Celli and I am a 22 year veteran of the United
States Army, a Service Disabled Veteran and have started two
businesses. I am the Chairman of the SBA's Veterans Small Business
Advisory Committee
You have assembled before you today some of the most renowned names
in the veteran community, you have heard their testimony and you have
listened to the needs of your constituents.
So now, what do we know? We know that the program hasn't hit the
mark, not yet. We know that the Federal agencies and Federally funded
programs charged with carrying forth this plan to promote and defend
veteran entrepreneurship all believe that they are hitting the mark. We
know that the veterans aren't so sure.
What does that mean and what can you do about it? It means that
when you set your own goals, and standards by which success is
measured, success is easily achieved.
I retired in 2002 as an Army Master Sergeant. When I was on active
duty, my job was to take care of my soldiers, and when I was working
with Army Recruiting Command, my job was to reassure the parents of the
new soldiers joining the Army that their sons and daughters were going
to be protected and taken care of. I was then, and I am still today
proud of our armed forces and proud to have worn our uniform.
One of the hardest things for me now, is to be working with
returning veterans as they process through Walter Reed and I feel a
deep sense of guilt; I feel like I have let them down because I am not
out there today in a hummvee protecting them. I have to keep reminding
myself that it's not my job anymore, I've tried to go back but I can't,
I am 40 percent disabled and I am no longer qualified to serve in the
Army, and it's hard. These men and women are hurt and in some cases
hurt bad.
Seven years ago, we passed a law that was meant to address the
needs of American Service Men and Women who wanted to compete as
businessowners in the American economy they fought so hard to protect.
Seven years ago we were riding high on a nation at peace and a full
strength military.
Seven years ago, we knew that we hadn't done enough to assist
veterans, particularly service-disabled veterans, in playing a greater
role in the economy of the United States by forming and expanding small
business enterprises (PL 106-50).
Seven years later, were still not there.
Why? No program management.
You created the right tool but put in place no measures for
success, oversight or accountability. You charged the VA, the SBA, TVC
with building programs, told all of the other Federal agencies to
support this effort and closed the book. No one was put in charge.
Since no one was in charge, and no standards were set, who could say
whether the agencies or the corporation was complying or not?
Well, based on the fact that we are here today and this is the
third Congressional hearing in almost as many months regarding the same
issue, it's apparent that your constituents are not satisfied, veterans
and non veterans alike. This has become such an important issue that
congressional leaders are working together in uncommon fashion as
represented here today by the Honorable Congresswoman from California,
Congresswoman Daily who has been asked to attend as a guest of this
Committee.
It may be time that we take a good hard look at restructuring this
program and assemble all of these independently moving parts into a
cohesively, high functioning machine. We would save money, effort and
time and it would finally put an end to the turf wars which have
plagued this program from the beginning.
Congress needs to establish an office to manage the program, a
``Veterans Business Program Management Office'' and it should be an
office with Federal authority. This office should be responsible for
monitoring, assisting, management and oversight of;
Veterans Entrepreneurship Advocacy
Veterans Entrepreneurship Training
Veterans Professional Skills Certification
Veterans Federal Procurement
And, assist and promote Veterans Procurement at the state
level) Promotion of Public / Private Partnerships with regard to
Veterans Entrepreneurship, Small Business and Employment
Entrepreneurial Vocational Rehabilitation Case Management
Compensated Work Therapy Training Directorate
This office should report directly to The President of the United
States and to Congress. Either This Committee, the Small Business
Committee or a new Committee comprised of representatives of each.
I have been approached by companies, small businesses and
entrepreneurs, both veteran owned and non veteran owned who have
offered to build complete companies with the sole intention of
employing only disabled veterans. We need a program which assists them
as well.
The written portion of this testimony contains detailed programs
and suggestions for implementation. I would be happy to continue to
work with your offices to build upon this very important and very
necessary program.
Members of Congress, I can't protect these veterans any more, but
you can. Help us. Help us build a program that will work and that will
be around long after we are gone, benefiting Americas warriors wounded
and whole, the men and women who have sacrificed so much and to whom we
owe so much in return.
We're not all Democrats, or Republicans, or Veterans, but we are
all Americans. Each and every one of us in this room have benefited
from the sacrifices of time, sweat and blood our American Service
members have made and continue to make for us each day.
Thank you for holding this hearing and thank you for your continued
interest in veterans entrepreneurship.
National Veterans Business Program Management Office
Program management office of
National Institute for Entrepreneurial Research and Development
(this is a very simplified overview of this suggestive program)
The National Institute for Entrepreneurial Research and Development
will be the headquarters for the Entrepreneurial Doctrine Command.
The Entrepreneurial Doctrine Command will be the national authority
for entrepreneurial development. This command will be assembled from a
co-operative group of sources of both government and non-government
representation.
All ``policy'' will be the result of recommendation from the
advisory board but will be ultimate decided on by the command director.
Organizational Structure:
Office of Economic Research
Office of the Small Business Administration
Office of Minority Development
Office of Veteran's Affairs
Office of Veterans Service Organizations
Office of Federal Procurement
Office of State Procurement
Department of Federal representation
Department of Defense
Department of the Interior
Department of Transportation
Department of (all)
Procurement preparation and strategic positioning
Major training commands:
Federal Procurement
State Procurement
Small business startup
Small business growth
Independent contractor structure
Facilitator certification
Non-profit organization development
Leadership College
Severely Disabled Self-Employment Directorate
Previously Incarcerated training Directorate
Community Outreach Development and Community Based Organization
Develop-
ment program
Inventors and New Market Product Concept College
Real-estate
Home based business
Compensated Work Therapy
Office of Public / Private Partnership
Training Programs:
Business start up Business etiquette (speaking, eating, dressing)
Business Growth Public speaking
Networking Presentation delivery
Time Management Asking for money
Sales Applying for a loan
Marketing Seeking funding from people you know
Leadership Seeking funding from investors
Business finances for the sole proprietor Business structure (legal structure, corp)
Business finances for the small business Small business and taxes (state and Federal)
Business financial management Professional licensing, certifications and permits
Federal contracting start-up Small business resources
Marketing to Federal agencies Registering your Small business (Veteran,
Grant writing Minority, Woman)
Concept Paper Writing The Federal Register
Proposal Writing Understand Fed Biz Ops
Answering an RFP (Request for Proposal) Small Business Liaison Officer Relationship
Developing a Board of Directors Management
Public Relations Understanding the FAR (Federal Acquisition
Benchmarking techniques and tracking Regulation)
Small business discovery laboratories
Small business communications (letter writing and
business etiquette)
[GRAPHIC] [TIFF OMITTED] 35642A.001
Veteran Owned Business Development Action Plan
Extended deployment of our national Guard and Reserve forces has
caused extreme hardship and has closed the doors of many of American
Veteran Owned Business. This program is designed to assist the Veteran
Small Business Owner to prepare for the businesses continued operation
and sets forth an action plan to assist and support the Veteran and
their business should the businessowner be called upon to serve.
A detailed action plan will be developed as an Operations Order
setting forth and addressing critical operational issues. At a minimum,
the plan will have;
A notarized Letter Of Instruction from the Veteran
Business Owner
An up to date business plan
Checks and or bank cards
Power of attorney
Alert roster and contact phone numbers
Financial template
Assets and liabilities
A video tape of the businessowner conveying his / her
wishes and directives in their absence Copies of insurance policies,
promissory notes, deeds, titles, articles of incorporation, etc.
A Last Will and Testament
Copies of deployment orders (where applicable)
Contact numbers for military unit of assignment and
branch manager
Copies of all keys, access codes and combination numbers
Back up electronic media data
Any additional information or object that will assist in
the smooth running of daily operation for the business
It is understood that successful execution of this plan will depend
on the structure of the business having been built in the franchise
model as a ``Turn Key'' business. In order to facilitate this, a well
planned and detailed organization chart will be documented. Each duty
and responsibility entered into the Organizational chart must have a
complete job description and ``employee manual'' which details and
explains the duties and responsibilities assigned that position.
The education and construction process of this program will require
a unique commitment from the businessowner as well as a solid
educational / mentorship program.
While the commercial programs exist to accomplish the intended
results, these programs are lengthy (18 to 24 month programs) and
expensive ($450.00 / month X 24 months = $10,800. / person). A
streamlined, accelerated and more cost effective program can be
developed. The resulting program would allow the Veteran to complete
the process in 6 to 12 months.
Additionally, a Memorandum of Understanding or contract would be
developed between the Veterans Business Resource Center (VBRC), the
mentored business and the Small Business Administration (SBA) as a
method of registering and tracking these businesses.
Eventually, businesses who successfully complete the Action Plan
and have their plan registered with the VBRC and SBA would be available
for emergency funding special tax consideration to assist and defray
any costs associated with extended military deployment.
Guard and Reserve Business Tax Forbearance Initiative
Concept: protect Veteran businessowners who become activated
pursuant to military orders IAW section 101 Title 10 United States Code
from Business Tax Liability which may result in extreme financial
hardship on the business and the veteran.
Action: To authorize a business tax forbearance whereby allowing
the selected category of duty status military Member to deposit their
estimated Federal business tax liability payments into an interest
bearing trust account, thus authorizing tax forbearance for a period of
time equal to the amount of active duty time performed plus 180 days.
This forbearance is to begin upon the effective date of the service
Member's orders and all tax obligations are to be satisfied in full no
later than 180 days following the termination of such orders.
Intrest--Any and all interest realized from the deposits of this
program are to be retained by the corporation and will not be
considered capital gains or profit and should subsequently be tax
exempt. The maximum allowable deposits subject to this protection shall
not exceed two times the actual tax liability. Any deposits enjoying
interest in excess of two times the finally established tax liability
will be subject to standard taxation IAW the corporation's tax burden.
(I allowed for up to two times the tax burden for two reasons, one--
businesses pay an estimated tax based on sales forecasts and two--to
provide businesses in this category an incentive to establish a savings
that will help to revitalize the business when they return to the
business.
Failure--Failure to satisfy the existing tax obligation by the end
of the 180th day following the return of the businessowner will result
in the businesses being subject to the standard interest and penalties
subject any business who fails to satisfy its tax obligation. The date
that such interest and penalties will be assesses will be the 181st day
following the termination of the duty orders to which the Member
entered this forbearance.
Multiple and concurrent assignment--Each period of active duty will
be treated as separate and independent actions if separated by more
than three duty days (the establishment of a duty day needs to be
addressed. This is important because in an effort to maximize training
funds, a military unit may issue a consecutive series of active duty
orders for 5 day periods to be paid for from one accounting method and
pay the military member for the weekends using another payment account
which does not necessarily require active duty orders. Further, home
station active duty may be restricted to 5 day increments, again due to
budget considerations). At no time will a unit create or extend active
duty requirements for the sole purpose of qualifying a businessowner
for participation in this program.
Inclusion of Veteran Owned Companies to
Section 7 (j) of the Small Business Act
Recommendation
Draft resolution for amendment to U.S. Small Business Act 1953,
section 7 (j), to include ``Veterans'' and ``Veteran Owned or
Operated''.
Justification
Congress finds the following:
The United States has done too little to assist veterans,
particularly service-disabled veterans, in playing a greater role in
the economy of the United States by forming and expanding small
business enterprises.
And
The United States must provide additional assistance and support to
veterans to better equip them to form and expand small business
enterprises, thereby enabling them to realize the American dream that
they fought to protect. [PL 106-50, ``Veterans Entrepreneurship and
Small Business Development Act 1999'']
And
It is the declared policy of the Congress that the government
should aid, counsel, assist, and protect, insofar as is possible, the
interests of small-business concerns in order to preserve free
competitive enterprise and to insure that a fair proportion of the
total purchases and contracts or subcontracts for property and services
for the government be placed with small-business enterprises. [The U.S.
Small Business Act 1953]
Program Overview
http://www.sba.gov/gcbd/7j.html
The Program
The mission of the U.S. Small Business Administration's (SBA's)
Office of Business Development (BD) is to assist economically and
socially disadvantaged businesspersons achieve competitive viability in
the marketplace. To that end, SBA has been authorized, under section
seven(j) of the Small Business Act, to enter into grants, cooperative
agreements or contracts, with public or private organizations that can
deliver management or technical assistance to individuals and
enterprises eligible for assistance under the Act. This assistance is
delivered through the seven(j) Management and Technical Assistance
Program to 8(a) certified firms, small disadvantaged businesses,
businesses operating in areas of high unemployment or low-income or
firms owned by low-income individuals [add ``or firms owned or operated
by veterans'' here].
SBA Regional Finance and Bond Surety
Veterans Small Business Advisory Councils
Recommendation
The Administrator of the SBA charges each Region to require their
districts to assemble SBA sponsored Veterans Small Business Finance and
Lending Advisory Councils consisting of a consortium of commercial
lenders, bonding agents and Veteran businessowners for the purpose of:
1. Review, coordinate, and monitor plans and programs developed in
the public and private sectors that affect the ability of small
business concerns owned and controlled by veterans to obtain capital,
credit and bond surety.
2. Promote the collection of business information and survey data
as they relate to veterans and small business concerns owned and
controlled by veterans regarding small business financing and bonding
ability.
3. Develop and promote initiatives, policies, programs, and plans
designed to foster small business financing and bonding programs owned
and controlled by veterans.
Program Outcome
By getting finance and bonding professionals directly involved with
the building and planning stage of Veteran Small Business Financing
programs, they will instinctively support and promote Veterans Small
Business Interests. The theory is the same as when a Non-Profit company
invites community members to sit on their Board of Directors. The Board
members take a personal interest in the promotion of the organization
and put added emphasis into networking and the promotion of these
organizations to assist in the organizations success.
The same theory applies here. The lending and bonding institutions
responsible for developing ``suggestions'', ``incentives'',
``programs'' and other work on behalf of veterans will have a personal
and professional stake in the success of the program thus giving the
programs ``top down'' emphasis.
This Council would be by invitation only and participants should be
``recognized'' by the administration in a creative way which may
include:
1. Certificate of participation signed by the President of the
United States
2. Annual invitation and award recognition at the national SBA
Small Business Week celebration
3. SBA Co-branding opportunities, SBA funded brochures
4. SCORE recognition and partnership opportunities
There are a number of more aggressive ``incentives'' these are some
of the more cost effective and least legally cumbersome. Other
incentives could include a more favorable rate for lenders who choose
to participate or ``preferred'' processing incentives or discounted
processing fees.
SUBMISSION FOR THE RECORD
Prepared Statement of Eric A. Hilleman, Deputy Director, National
Legislative Service, Veterans of Foreign Wars of the United States
MR. CHAIRMAN AND MEMBERS OF THIS COMMITTEE:
On behalf of the 2.4 million members of the Veterans of Foreign
Wars of the U.S. (VFW) and our Auxiliaries, I would like to thank you
for your invitation to testify at today's important hearing on
veterans' entrepreneurship and self-employment.
Capitalism is one of the defining pillars of our culture and our
democracy. The efficiency and ingenuity inspired by competition has
driven the growth of our economy and the diversity in our marketplace.
Small businesses make up the bulk of the American business landscape
serving as a testament to the American dream. One person with an idea
and the right mix of innovation, creativity, and dedication can rise
from humble beginnings to build the Wal-Marts and Microsofts of
tomorrow.
Starting, owning, and operating a business can be a daunting task.
Service members need a set of transition tools to aid in moving from
active duty military to civilian entrepreneur. Veteran entrepreneurs
return home to take on a role in the family business, purchase a
franchise, or strike out on their own to build their business one brick
at a time. Regardless of how they embark upon the road of
entrepreneurship or at what stage of their lives, our Nation benefits
from their efforts. The challenges this community of entrepreneurs face
are particular and unique.
As the bulk of service members separate from the military, they
benefit from: Transition Assistance Programs, employment center help,
and veterans' hiring preferences. Veteran entrepreneurs, being a
smaller sector of this population, lack such assistance. Many veteran
entrepreneurs are able to benefit from government efforts to assist
small businesses in general, but there is not a centralized source of
information to aid the veteran entrepreneur population. Many of the
sources of information are peppered throughout these sites:
www.vetviz.gov, www.sba.gov, www.business.gov, www.dol.gov,
www.acq.osd.mil, and www.veteranscorp.org. The VFW believes a
comprehensive Web site containing the depth and breadth of information
on veterans small businessownership would be ideal.
Along similar lines, we must also examine the assistance available
to--and the specific needs of--Guard and Reserve members. By
activating, they leave their businesses behind in order to do the work
of their government. Currently the Small Business Administration (SBA)
provides debt relief on SBA-direct or guaranteed loans, but education
and outreach could provide assistance before a loan goes into default.
We must carefully consider how and what we provide for this distinct
group of service members. The Uniformed Services Employment and
Reemployment Act (USERA) protects the jobs of deployed service members;
so too, we need measures to prevent Guard and Reserve entrepreneurs
from losing their livelihoods.
In the past, Congress has ordered Government Accountability Office
studies of veterans' small business. However, these studies have often
focused more on the efficacy of the National Veterans Business
Development Corporation than on businessowners. We believe that the
best interests of the country are served in launching a comprehensive
review of the make-up of veteran-owned small business, the available
programs, and the needs of this community.
The VFW feels it is prudent to consider legislative changes that
will aid small businesses; and these changes must be developed and
disseminated in a manner that is user friendly. Comprehensive changes
to government contract standards, outreach programs, loans, service
centers, web-based tools, education benefits, and mentorship programs
are best considered once the veteran-owned small business community is
better understood.
Understanding the veteran-owned small business community is
essential to moving forward with both fundamental and substantive
changes. We encourage Congress to examine the challenges and barriers
that veteran entrepreneurs encounter. The study should address the
existing programs that answer these questions, as well as how the
government may deliver the benefits and services addressed in these
questions:
Where can one find information on starting a business?
How to develop a sound business plan? Where / how to
obtain financing for my business?
How to grow a business and launch a marketing plan? What
about client / customer development?
What education benefits are available for building a
business?
How does one obtain contracts with the Federal
Government?
Where / when is bonding and / or insurance necessary for
government contracting?
The Guard and Reserve members who own and operate small businesses
face intense challenges in the lead-up to frequent deployments. A
different set of concerns are addressed with the repeated, unexpected,
and extended activations in Iraq, Afghanistan, and / or providing
disaster relief:
Who will run the business when the service Member is
deployed?
How does one care for a family with the loss in income
from activation?
The business is failing; what assistance is available?
The current industry standards and information has
changed during the deployment; what training is available to bring the
service Member up to speed?
Will the government provide training for a spouse to run
a business?
How does one rekindle a business? Are there loans or
grants available to get back to work?
In studying the types of Guard and Reserve Member businesses, we
can better provide remedial industry training, access to capital, and
bridge assistance to the families of deployed members.
This hearing is an excellent step in the right direction. In order
for Congress to act to on behalf of veterans and a grateful nation, we
must clearly understand who these veterans / small business owners are.
We must further understand the types of business that are affected by
assistance programs and which types are excluded. Any barriers to
assistance and / or challenges exclusive to the veterans' small
business development must be addressed. The VFW urges careful
consideration of these issues, keeping always at its heart, the best
interests of America's veterans.
MATERIAL SUBMITTED FOR THE RECORD
Executive Order 13360--Providing Opportunities for Service-Disabled
Veteran Businesses To Increase Their Federal Contracting and
Subcontracting
Presidential Documents
Title 3--The President [Executive Order 13360 of October 20, 2004]
By the authority vested in me as President by the Constitution and
the laws of the United States of America, and in order to strengthen
opportunities in Federal contracting for service-disabled veteran
businesses, it is hereby ordered as follows:
Section 1. Policy. America honors the extraordinary service
rendered to the United States by veterans with disabilities incurred or
aggravated in the line of duty during active service with the armed
forces. Heads of agencies shall provide the opportunity for service-
disabled veteran businesses to significantly increase the Federal
contracting and subcontracting of such businesses. To achieve that
objective, agencies shall more effectively implement section 15(g) of
the Small Business Act (15 U.S.C. 644(g)), which provides that the
President must establish a goal of not less than 3 percent for
participation by service-disabled veteran businesses in Federal
contracting, and section 36 of that Act (15 U.S.C. 657f), which gives
agency contracting officers the authority to reserve certain
procurements for service-disabled veteran businesses.
Sec. 2. Duties of Agency Heads. To implement the policy set forth
in section one, heads of agencies shall:
(a) develop a strategy to implement the policy set forth in section
one;
(b) make the agency's strategy publicly available and report
annually to the Administrator of the Small Business Administration on
implementation of the agency's strategy;
(c) designate a senior-level official who shall be responsible for
developing and implementing the agency's strategy;
(d) include development and implementation of the agency's strategy
and achievements in furtherance of the strategy as significant elements
in any performance plans of the agency's designated agency senior-level
official, chief acquisition officer, and director of small and
disadvantaged business utilization; and
(e) include in the agency's strategy plans for:
(i) reserving agency contracts exclusively for service-disabled
veteran businesses;
(ii) encouraging and facilitating participation by service-disabled
veteran businesses in competitions for award of agency contracts;
(iii) encouraging agency contractors to subcontract with service-
disabled veteran businesses and actively monitoring and evaluating
agency contractors' efforts to do so;
(iv) training agency personnel on applicable law and policies
relating to participation of service-disabled veteran businesses in
Federal contracting; and
(v) disseminating information to service-disabled veteran
businesses that would assist these businesses in participating in
awards of agency contracts.
Sec. 3. Additional Duties of Administrator of the Small Business
Administration. The Administrator of the Small Business Administration
shall:
(a) designate an appropriate entity within the Small Business
Administration that shall, in coordination with the Veterans Affairs'
Center for Veterans Enterprise (CVE), provide to service-disabled
veteran businesses information and assistance concerning participation
in Federal contracting;
(b) advise and assist heads of agencies in their implementation of
section two of this order; and
(c) make available to service-disabled veteran businesses training
in Federal contracting law, procedures, and practices that would assist
such businesses in participating in Federal contracting.
Sec. 4. Additional Duties of Administrator of General Services. The
Administrator of General Services shall:
(a) establish a governmentwide Acquisition Contract reserved for
participation by service-disabled veteran businesses; and
(b) assist service-disabled veteran businesses to be included in
Federal Supply Schedules.
Sec. 5. Additional Duties of the Secretary of Defense. The
Secretary of Defense shall direct the Defense Acquisition University
(DAU) to develop training on contracting with service-disabled veteran
businesses and make this training available online through the DAU
continuous learning program.
Sec. 6. Additional Duties of the Secretary of Veterans Affairs. The
Secretary of Veterans Affairs shall assist agencies by making available
services of the CVE and assist in verifying the accuracy of contractor
registration databases with regard to service-disabled veteran
businesses.
Sec. 7. Additional Duties of the Secretary of Labor and Secretary
of Veterans Affairs. The Secretary of Labor and Secretary of Veterans
Affairs shall, respectively, direct the Transition Assistance Program
and the Disability Transition Assistance Program to educate separating
service members as to the benefits available to service-disabled
veteran businesses and as to potential entrepreneurial opportunities.
Sec. 8. Definitions. As used in this order:
(a) the term ``agency'' means an ``executive agency'' as that term
is defined in section 105 of title five, United States Code, excluding
an executive agency that has fewer than 500 employees, the government
Accountability Office, or a Government corporation;
(b) the term ``service-disabled'' means, with respect to
disability, that the disability was incurred or aggravated in the line
of duty in the active service in the United States Armed Forces;
(c) the term ``service-disabled veteran'' means a veteran, as
defined in 38 U.S.C. 101(2), with a disability that is service-
connected, as defined in 38 U.S.C. 101(16);
(d) the term ``service-disabled veteran business'' means a small
business concern owned and controlled by service-disabled veterans, as
defined in section three(q) of the Small Business Act (15 U.S.C.
632(q)); and
(e) the term ``small business concern'' has the meaning specified
in section three(a) of the Small Business Act (15 U.S.C. 632(a)) and
the definitions and standards issued under that section.
Sec. 9. General Provisions. (a) Heads of agencies shall carry out
duties assigned by sections three, four, five, six, and seven of this
order to the extent consistent with applicable law and subject to the
availability of appropriations.
(b) To the extent permitted by law, an agency shall disclose
personally identifying information on service-disabled veterans to
other agencies who require such information in order to discharge their
responsibilities under this order.
(c) An agency that consists of a multi-member commission shall
implement this order to the extent it determines appropriate to the
accomplishment of the agency's mission.
(d) This order is not intended to, and does not, create any right
or benefit, substantive or procedural, enforceable at law or in equity
by any party against the United States, its departments, agencies,
instrumentalities or entities, its officers, employees or agents, or
any other person.
GEORGE W. BUSH
THE WHITE HOUSE,
October 20, 2004.